Air Canada Pilots Offered New Mediator Amid Strike Vote

Air Canada (AC\A) and its pilots union were offered a new government mediator for contract talks after a legally mandated “cooling off” period ended and workers considered authorizing a strike.

Labor Minister Lisa Raitt urged both parties to continue working toward a deal and proposed a six-month process with the new negotiator, according to a statement today from her office. A government representative has already been working with the airline and its pilots, Raitt said.

The end of the “cooling off” period just after midnight today allows Air Canada’s pilots to strike and the carrier to lock them out, provided each side gives 72 hours’ advance notice. Both sides have said they will continue negotiations.

“A work stoppage at Air Canada (AC/A) is contrary to the best interest of hard-working Canadians, Canadian business and the already fragile economy,” Raitt said in the statement.

The labor minister thwarted a potential strike in October, referring a dispute between Air Canada and its flight attendants to a federal labor tribunal. In June, the airline’s striking service workers reached a tentative agreement minutes after the government introduced legislation that would have forced an end to the labor action.

‘Best Deal’

“The parties can still strike or lock out, but the minister believes that the parties just need more time at the table,” Ashley Kelahear, a spokeswoman for Raitt, said today in a telephone interview. “In the end, the best deal is the one that the two parties can get themselves.”

The Air Canada Pilots Association plans to disclose the results of the strike-authorization vote about 6 p.m. Toronto time, Paul Howard, a spokesman for the union, said in an e- mailed message. An authorization would place the association, which represents about 3,000 pilots, on an “equal footing” with the company, Howard said in a telephone interview yesterday.

A strike or a lockout wouldn’t necessarily trigger a shutdown of the airline by either party, he said.

Air Canada is “confident that a disruption can be avoided,” said Peter Fitzpatrick, a spokesman in Toronto. “It remains business as usual, and customers can book and make their travel plans with confidence.”

Chief Executive Officer Calin Rovinescu said on a Feb. 9 conference call with analysts that the company intends “to not impose a new collective agreement in the near term.” Fitzpatrick said yesterday that those comments still stand.

Three Labor Agreements

Air Canada reached three separate agreements with unions that represent airline dispatchers, crew schedulers, mechanics, baggage handlers and cargo agents earlier this month. About 8,750 employees are covered by the accords.

Talks between pilots and the company began in October 2010. After rejecting a tentative agreement in May, the pilots are working under the terms of their last accord, which expired at the end of March. That contract froze pay at 2008 rates, the union said.

Pilots are resisting the possible creation of a low-cost unit to return to profit after the Montreal-based airline completed an expense-reduction plan last year.

Union President Paul Strachan said in an interview last month that Air Canada reintroduced “many controversial items” from the failed labor agreement, in addition to demanding “significant” concessions. He declined to be more specific.

Unresolved labor negotiations “will remain an overhang” on Air Canada stock, Cameron Doerksen, an analyst with National Bank Financial in Montreal, said in a Feb. 10 note to clients. “Successful resolution of the labor issues would likely be a strong positive catalyst for the stock once achieved.”

Air Canada reported a fourth-quarter net loss of C$60 million ($60 million) last week, compared with net income of C$89 million a year earlier. Sales rose 3.2 percent.

Air Canada’s Class B stock was unchanged at C$1.04 at 1:35 p.m. in Toronto. The shares lost 71 percent of their value in 2011.

To contact the reporter for this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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