Skip to main content

Air Canada employees rally on Parliament Hill in Ottawa on Tuesday, September 20, 2011.THE CANADIAN PRESS/Sean Kilpatrick

Air Canada and the union representing flight attendants have called a truce and reached a tentative agreement, spurred by the spectre of back-to-work legislation in Ottawa.

The country's largest airline and the Canadian Union of Public Employees (CUPE) announced the settlement just hours before 6,800 flight attendants were set to go on strike.

"The conclusion of a tentative agreement is welcome news for our customers and we want to thank them for their ongoing loyalty and support during this round of contract negotiations. It's business as usual and customers can continue to make their travel plans on Air Canada with confidence," Susan Welscheid, Air Canada's senior vice-president of customer service, said in a statement Tuesday.

Jeff Taylor, president of CUPE's Air Canada component, had been feuding with Ms. Welscheid and other Air Canada executives, but adopted a conciliatory tone after a marathon set of negotiations. "The union's executive committee will recommend that its members accept this tentative agreement," he said after the breakthrough in talks, which were assisted by two federal mediators.

Last month, 88 per cent of flight attendants who cast ballots rejected a proposed labour pact recommended by CUPE's negotiating team.

Ms. Welscheid angered union members last week when she wrote a six-page letter on the "facts of life" in choosing a career as a flight attendant, notably the irregular work schedules. But the two sides said Tuesday they have sorted out their differences.

Federal Labour Minister Lisa Raitt, who cautioned that she was preparing to intervene with back-to-work legislation, noted the high stakes. "With the global economy still very fragile, our government is committed to protecting Canada's economy," she said in a statement. "I am pleased that Air Canada and CUPE have come to an agreement that will avoid a damaging work stoppage without interruption to services to Canadians."

Hundreds of flight attendants and labour supporters attended rallies Tuesday morning at major airports across Canada. Instead of picketing this week with purple T-shirts and ribbons, they will be awaiting details of the new collective agreement. The previous CUPE contract expired March 31.

Ratification meetings have been scheduled for Vancouver, Calgary, Toronto and Montreal. CUPE members, who have flocked to a Facebook discussion page to voice criticisms of both management and union negotiators, are poised to study the proposed contract for improvements, notably better job security for workers on the main line should a discount leisure airline be launched next year.

Besides union concerns about a low-cost carrier, sticking points included plans to place new hires in watered-down pensions and disagreements on crew rest between assignments. An industry insider said the tentative pact calls for wage hikes of 2 per cent in each of the first three years and 3 per cent in the final year.

Robert Kokonis, president of airline consulting firm AirTrav Inc., said that even though Ottawa effectively ensured that any work stoppage would have been no more than three days, Air Canada still faced financial pain. He estimated the Montreal-based carrier avoided a daily hit of $11.7-million to operating revenue and $1.2-million to operating profit.

The harm to Air Canada's brand would have extended well beyond a strike, with consumers tempted by rivals such as WestJet Airlines Ltd. and Porter Airlines Inc., Mr. Kokonis said.

Air Canada averted major disruptions to its network in the event of a strike. The carrier said its mainline routes will run normally on Wednesday, though it will take until Thursday to restore regular service for some regional flights operated by Jazz through the Air Canada Express brand.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe