MONTREAL — Talks are continuing between Air Canada (TSX:AC.B) and its customer service and sales staff to head off a strike threat, but there's no sign of a settlement.
But both sides hope they can hammer out a deal before a union imposed strike deadline of 12:01 a.m. Tuesday.
Jamie Ross, president of the Canadian Auto Workers local that represents the 3,800 workers, says they are prepared to negotiate right up until the deadline.
She says employees' pensions remain a key issue in the talks.
The workers served a 72-hour strike notice on Friday.
The threat of job action has sparked concern from travellers, although Air Canada has downplayed the potential impact.
In a statement Sunday, the airline said it has a plan to continue operating a full schedule.
"Management has been trained to provide assistance at the airports that would be affected," said Duncan Dee, Air Canada's chief operating officer.
Under the airline's proposal, new hires would receive defined-contribution pension plans instead of the defined-benefit plans employees currently earn.
Defined-benefit plans are designed to provide retirees with a predictable income, but they expose the airline to additional costs if the pension fund's assets aren't able to pay for the benefits.
With defined-contribution plans, the airline's contribution is limited to a set, negotiated amount and payouts to retirees depend on the performance of the underlying investments.
Union officials have said the airline wants to also gut the pensions of current workers.
The federal government issued a statement on the weekend urging both sides in the Air Canada labour dispute to reach a negotiated agreement as soon as possible.
Air Canada faces other labour problems.
Last Monday, the Canadian Union of Public Employees _ which represents 6,800 Air Canada flight attendants _ asked for a federal conciliator to assist in its contract talks with the airline.
Air Canada was forced into creditor protection from April 2003 to September 2004, due in part to the cost of dealing with the company's pension deficit.
The company's unions agreed to accept numerous concessions worth billions to help the company to survive, but they insisted their defined-benefit pension plans be saved.
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