Toronto Star
Vanessa Lu
Business Reporter
Frustrated by what it calls Air Canada’s demands for concessions that could lead to significant outsourcing of work, the pilots’ union has called a strike vote.
The move comes as a last resort since the Air Canada Pilots Association has repeatedly insisted for months it does not want a strike, even though it can legally do so at 12:01 a.m. next Tuesday if it gets a mandate from its members.
“The corporation has tabled a position that asks for more concessions and threatens our entire careers through scope changes that would ship much of our flying outside Air Canada, possibly offshore,” writes master executive council chair Gary Tarves in an internal newsletter to pilots.
This week the union has been holding briefings with its 3,000 members across the country, with the final one wrapping up in Winnipeg on Thursday morning.
Also Thursday, Air Canada reported its fourth-quarter earnings, which were disappointing, with an operating loss of $98 million, blamed on high fuel costs and maintenance expenses.
For the full year, Air Canada reported a net loss of $249 million in 2011, which included foreign exchange losses of $54 million, compared to a net loss of $24 million in 2010.
In a last-ditch effort, the pilots’ union on Wednesday offered to defer any strike vote until March 22, and any work stoppage until April 2 in exchange for a commitment from the airline that it would not lock out the pilots or change the terms of the contract before April 2, as it can on Valentine’s Day.
The airline rejected that proposal, but offered to give five days’ notice before changing the terms of the contract.
“Under these circumstances, the time for you to make your decision has come,” Tarves tells members, about calling the strike vote. “There should be only one logical conclusion that you draw from the information we have presented — that is to show your unwavering support for your fellow Air Canada pilots and, indeed, for your profession.
“There is truly no alternative,” he says.
However, Tarves cautions that a strike mandate does not necessarily constitute a decision on a particular course of action, but “levels the balance of power at the bargaining table and protects you under the law.”
Both the union and company met with Labour Minister Lisa Raitt on Monday, with the pilots stressing that they wanted a negotiated settlement.
After the meeting, Raitt’s spokesperson Ashley Kelahear said both sides indicated “there would be no work stoppage and no effect on the travelling public in the short-term.”
Labour uncertainty has a negative impact on bookings, and with March break approaching, the airline clearly does not want the negotiations to drag on.
Talks first began nearly a year and a half ago, and a tentative deal, reached last spring, was rejected by pilots. This latest round of negotiations restarted again in late November with a new negotiating team after rank-and-file pilots turfed some union executives.
For the pilots, they worry any strike action could prompt Raitt to intervene as she did in the case of Air Canada’s flight attendants last fall.
She blocked any walkout by using ministerial power — sending the dispute to the Canada Industrial Relations Board, citing concerns about the nation’s health and safety.
The two sides eventually agreed to binding arbitration — and the arbitrator gave the flight attendants the same contract that they had rejected earlier.
The pilots are concerned Air Canada wants to outsource flying for a new discount airline, which would fly to vacation destinations in Europe and down south. The airline has hinted at an offshore model, similar to one used by Australia’s Qantas that operates a discount airline called Jetstar.
Air Canada’s president and CEO Calin Rovinescu has said that starting a low-cost carrier is key to remaining competitive in this growing market.
“We view participation in the low-cost segment of the leisure market as important for the corporation, and we are evaluating various models that would allow us to participate in this market segment,” Rovinescu said in the new release, announcing earnings on Thursday.
The company has also said it must deal with new federal regulations that ban mandatory retirement. The change would allow pilots to fly beyond age 60, which would make it tougher for younger pilots to move into the more lucrative aircraft experienced pilots fly.