Politics likely pushed Air Canada toward deal with 'unheard of' gains for pilots

Politics, public opinion and salary hikes south of the border helped push Air Canada toward a deal that secures major wage gains for pilots, experts say.

The tentative agreement includes a 42 per cent wage hike over four years, according to one source who was not authorized to speak publicly on the matter.

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On Sunday, the country's biggest airline and the union representing its 5,200-plus pilots announced they had reached a would-be contract, averting a strike that would have grounded flights and affected some 110,000 passengers per day.

Shortly before, Prime Minister Justin Trudeau had made it plain the two sides should hash out a deal themselves.

On Friday, he said the government would not step in to fix the impasse — unlike during a massive railway work stoppage last month and a strike by WestJet mechanics over the Canada Day long weekend. Trudeau said the government respects the right to strike and would only intervene if it became apparent no negotiated deal was possible.

Trudeau's government was unlikely to consider back-to-work legislation after the NDP tore up its agreement to support the Liberal minority in Parliament, said John Gradek, who teaches aviation management at McGill University. Conservative Leader Pierre Poilievre, whose party has traditionally toed a more pro-business line, also said last week he was "not going to support pre-empting those negotiations. 

"We stand with the pilots and their right to fight for a fair deal, good wages."

Backed by business leaders, Air Canada CEO Michael Rousseau asked Ottawa on Thursday to step in pre-emptively with binding arbitration "to intervene if talks fail before any travel disruption starts."

Teamsters Canada Rail Conference members picket outside the CPKC headquarters in Calgary, Alta., Friday, Aug. 23, 2024. THE CANADIAN PRESS/Jeff McIntosh

The request may have fallen flat. Gradek said he believes public frustration over thousands of cancelled flights would have flowed toward Air Canada rather than Ottawa, prompting the carrier to concede to a deal yielding "unheard of" gains for employees.

"It really was a total collapse of the Air Canada bargaining position," he said.

"In my opinion, public opinion basically pressed the federal cabinet, including the prime minister, to basically keep their hands clear of negotiations and looking at imposing a settlement," Gradek continued.

"Air Canada ran out of support as the week wore on, and by the time they got to Friday night, Saturday morning, there was nothing left for them to do but to basically try to get a deal set up and accepted by [Air Line Pilots Association]."

Pilots are slated to vote in the coming weeks on the four-year contract.

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Last year, pilots at Delta Air Lines, United Airlines and American Airlines secured agreements that included four-year pay boosts ranging from 34 per cent to 40 per cent, ramping up pressure on other carriers to raise wages.

After more than a year of bargaining, Air Canada put forward an offer last month centred around a 30 per cent wage hike over four years.

But the final deal, should union members approve it, grants a 26 per cent increase in the first year alone, retroactive to September 2023, according to the source. Three wage bumps of four per cent would follow in 2024 through 2026.

Air Canada said Sunday the tentative contract "recognizes the contributions and professionalism of Air Canada's pilot group, while providing a framework for the future growth of the airline."

The union issued a statement saying that, if ratified, the agreement will generate about $1.9 billion of additional value for Air Canada pilots over the course of the deal.

This report by The Canadian Press was first published Sept. 16, 2024