MONTREAL - Air Canada has avoided a second strike this summer after reaching a tentative collective agreement with the union representing about 6,800 flight attendants.
The deal with the Canadian Union of Public Employees is subject to member ratification and aapproval by Air Canada's board of directors.
It was reached following 17 weeks of negotiations and the requested participation of a federal conciliator.
The union said the five-year agreement includes wage increases, pension protection, better crew rest, and increased meal allowances.
As was the case with customer service workers, some issues related to pensions will be referred to arbitration.
"We are happy with the deal,'' Jeff Taylor, president of CUPE’s Air Canada component, said in a statement. ''We believe this is the best agreement we could get in the current context."
He said the union will now explain the terms of the tentative agreement to members across the country.
A ratification vote will likely be held within three weeks.
The latest collective agreement expired March 31. Negotiations had been ongoing since April 6.
"We are very pleased to have reached a tentative agreement that maintains industry-leading compensation and benefits for Air Canada's flight attendants while ensuring the long-term sustainability of the airline," Susan Welscheid, Air Canada's senior vice-president of customer service, said in a news release.
The agreement with flight attendants comes nearly two months after Air Canada's (TSX:AC.B) 3,800 customer service workers, represented by the Canadian Auto Workers union, were on strike for three days.
The two sides came to an agreement shortly after federal Labour Minister Lisa Raitt prepared back-to-work legislation.
Customer service and airport workers voted 87.7 per cent in favour of a new collective agreement.
CAW president Ken Lewenza said it was achieved after weeks of tough bargaining on many difficult issues, including the airline's demands for significant concessions and cuts to the pension plan.
The CAW agreement provided workers with wage increases of nine per cent over four years. The union said it also re-establishes a 30-minute paid lunch break, secures work at Chorus (TSX:CHR.B), the Halifax airline formerly known as Jazz Air, and provides many other improvements.
It wasn't immediately clear if financial terms of the deal with flight attendants was any different. Nor was there any indication whether flight attendants agreed to any changes that would allow Air Canada to launch a low-cost carrier.
Air Canada CEO Calin Rovinescu has said Canada's largest airline would only introduce a low-cost carrier next year if it can sustainably reduce labour and other costs.
It said the affiliated carrier that will mainly service the tour market would create jobs for 462 pilots, three times as many flight attendants and some airport and maintenance positions.
In May, Air Canada pilots voted 67 per cent against a tentative agreement that attracted the participation of all but 100 of 2,900 union members.
The International Association of Machinists and Aerospace Workers, which represents mechanics and baggage handlers at Air Canada, was scheduled to return to the bargaining table in July.
The unions each say the main issue is over the establishment of a defined contribution pension plan for new hires, instead of the current defined benefit plan — the same sticking point as with the customer service workers.
With defined contribution plans, the company's contribution is limited to a set, negotiated amount and payouts to retirees depend on the performance of the underlying investments. Defined benefit plans require a set amount to be paid to retirees.
Air Canada is set to report its second-quarter results on Thursday.
The airline is expected to report 20 cents per share in adjusted losses on $2.9 billion of revenues, down from a loss of 72 cents on $2.65 billion of revenues a year earlier.
The cost of jet fuel has surged by 40 per cent in Canadian dollars from a year ago.
Air Canada and rival WestJet (TSX:WJA) have implemented price increases to offset the higher costs and take advantage of improved consumer confidence in Canada.
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