Air Canada has reached a tentative four-year agreement with 5,200 of its union pilots, avoiding a shutdown of Canada’s largest airline.
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A work stoppage could have occurred Wednesday if either party had set a strike or lockout notice on Sunday. Such a shutdown would have halted the movement of cargo flown via the airline, both domestically and cross-border, potentially impacting Canadian supply chains.
But a new deal eliminates any of those worries. While general cargo and e-commerce shipments had continued to fly via Air Canada through the agreement, some goods had already seen restrictions. These included expedited parcels, high-value cargo, temperature-sensitive products, pharmaceuticals and animals.
If a complete shutdown had occurred at Air Canada, it would have taken seven to 10 days to return to normal operations, the company said last week.
The Montreal-based airline operates nearly 670 flights per day across its Air Canada and Air Canada Rouge banners, says it carries over 110,000 passengers a day and 30 percent of Canada’s air freight.
Terms of the new agreement will remain confidential pending the ratification vote by the Air Line Pilots Association (ALPA) , which is expected to be completed over the next month. The deal also has to be approved by Air Canada’s board of directors.
If ratified, the agreement will generate an approximate additional $1.9 billion of value for Air Canada pilots over the course of the deal, according to the union. Bloomberg reported that the airline offered to increase the aviators’ pay by 4 percent annually over three years, plus an upfront 26 percent pay boost alongside other benefits.
“While it has been an exceptionally long road to this agreement, the consistent engagement and unified determination of our pilots have been the catalyst for achieving this contract,” said Charlene Hudy, chair of the Air Canada ALPA Master Executive Council. “After several consecutive weeks of intense round-the-clock negotiations, progress was made on several key issues including compensation, retirement, and work rules. This agreement, if ratified by the pilot group, would officially put an end to our outdated and stale decade-old, ten-year framework.”
That deal was ratified in 2014 and provided pay increases of about 2 percent annually, but expired nearly one year ago on Sept. 20, 2023. The small pay increases have been a major point of contention for the union, which pointed out that pilots with 12 years of experience flying Boeing 777s at United, Delta and American Airlines make 76 percent more in salary than their Air Canada counterparts.
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Talks entered private mediation from January to June 2024, at which point the union filed a notice of dispute with then-Labour Minister Seamus O’Regan. O’Regan appointed federal mediators late that month because the two sides were unable to reach a new collective agreement.
Canada’s Labour Minister Steven MacKinnon thanked both parties and the federal mediators for preventing disruptions at the airline.
“I wish to salute the efforts of Air Canada and its pilots, who approached the discussions with seriousness and a resolve to get a deal,” MacKinnon said in a statement. “Negotiated agreements are always the best way forward and yield positive results for companies and workers.”
Air Canada and other industry associations had called on MacKinnon to intervene in the negotiations, just as he did in the day after Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) locked out 9,300 railroad employees during their contract negotiations. That lockout shut down both railroads entirely for 16 hours before MacKinnon referred the two sides to the Canada Industrial Relations Board for binding arbitration , forcing the employees back to work.
Neither the Teamsters or the railways have since agreed to a new deal.
Like the Teamsters, ALPA’s Hudy had been against government intervention, saying that such a move incentivizes companies not to come up with their best offer.
It doesn’t appear MacKinnon intended to intervene, with the minister previously citing that there were “significant differences between those two situations.”
As for Air Canada, the airline operates 252 aircraft in 47 countries, including 35 widebody and freighter flights to the U.S. each week. The airline recently expanded its cross-border operations in the U.S., with the company deploying a 767 freighter from Toronto to Chicago O’Hare three times per week starting in early June. The service complements the other freighter destinations in the U.S.: Atlanta, Los Angeles and Miami.
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