An Air Canada plane at Winnipeg's James Armstrong Richardson International Airport on Sept. 14.Fred Lum/The Globe and Mail
Air Canada’s AC-T pilots would receive cumulative raises of almost 42 per cent in a four-year tentative agreement announced over the weekend, averting a strike or lockout that would have disrupted travel for hundreds of thousands of passengers and harmed the Canadian economy.
The agreement, which must be approved by more than 5,200 Air Canada pilots in votes over the next month, headed off what would have been the latest in a string of labour disruptions affecting Canada’s transportation network in recent months, after a strike by WestJet mechanics in June and lockouts at Canadian Pacific Kansas City railway and Canadian National Railway last month.
The Air Line Pilots Association (ALPA) had been pushing to narrow the pay gap with pilots at other Canadian and U.S. airlines, as well as scheduling provisions allowing pilots to make more and spend more time at home. Air Canada had said it had offered a contract with raises of 30 per cent and improved work-life balances, and called the union’s pay demands unrealistic.
The tentative contract replaces one reached 10 years ago that provided raises of 2 per cent a year. The new agreement would mean an additional $1.9-billion for its members over the life of the contract, the union said.
The company had urged the federal government to intervene in the event of a strike, as it did to end the railway lockouts and as it tried to do, unsuccessfully, to end the WestJet strike.
Under the tentative deal, the pilots would receive a 26-per-cent raise retroactive to September of 2023, then 4-per-cent raises in 2024, 2025 and 2026, according to the agreement seen by The Globe and Mail.
In the second year of the deal, which begins on Sept. 30, 2024, a Boeing 737 captain, the most senior crew member, would be paid $280 to $312 an hour, depending on how many years they have been in that position, A first officer on the same plane would start at $87 an hour, increasing to $207 if they have 12 years’ seniority.
The new agreement would start hourly pay for a relief pilot, the most junior, on a wide-body plane at $87 an hour. The hourly pay for captains on wide-body planes would range from $317 to $424, depending on the model of aircraft.
The union has noted that crews are only paid when the plane is moving. They also spend a lot of time away from home and unpaid in faraway places.
The airline commented on the deal Sunday. “We said we would stay engaged to reach a deal until the last minute and we are happy to have reached a tentative agreement that recognizes the contributions and professionalism of our pilots,” Air Canada spokesperson Peter Fitzpatrick said in an e-mailed statement.
The two parties announced that they had reached the agreement just past midnight on Sunday, after the two sides had suggested they were far apart, particularly on wages, in the days leading up to the deadline.
Charlene Hudy, a pilot who heads the Air Canada union, said in a statement that weeks of “intense round-the-clock negotiations” yielded a deal with improved pay, retirement and work rules.
“This agreement, if ratified by the pilot group, would officially put an end to our outdated and stale decade-old, 10-year framework,” Ms. Hudy said.
The stakes were high for the Canadian economy: In a report released late last week, Desjardins Group estimated that a two-week shutdown could cause a loss in real GDP of about $1.4-billion. An impasse could also halt air-cargo shipments such as medical supplies and high-value goods.
News of the deal came as a relief to Air Canada passengers, who had been braced for a possible shutdown that would upend travel plans. The airline had warned customers to make alternate arrangements and offered to pre-emptively rebook flights that could be affected by a strike or lockout.
At the Halifax Stanfield International Airport on Sunday, Sandra Traynor and Gwen Milley were relieved and ecstatic that their two-week “trip of a lifetime” to Italy to celebrate their 60th birthdays was going ahead.
“We were up all night wondering if the strike was going to happen,” said Ms. Traynor of Halifax, adding that the two were girding themselves for disappointment. “We would’ve lost probably $8,000.”
A travel agent had offered the pair an opportunity to change the date of their flight and fly into Frankfurt earlier instead of waiting for their Sunday afternoon flight to Rome via Montreal, but they decided to gamble on Air Canada.
“It was terrifying,” said Ms. Milley, who lives in Kingston, N.S., about an hour northwest of Halifax. “We’re directionally challenged so the thought of landing and having to transfer in a huge airport, we’re like ‘No, we can’t do that.’ "
Pilots’ compensation must be understood in the context of the increasing workloads in the profession, said Geraint Harvey, a professor at Western University who studies human-resources management in the airline industry.
“There are more flights, and this has an impact on workloads. That’s a big issue,” Prof. Harvey said. He noted that from 2012 to 2019, there was a 23-per-cent increase in the number of pilots working at Canadian airlines, a number that has not kept up with the growth in the number of passengers. “Workload and scheduling is a major concern for airline pilots.”
North American airlines are also competing for pilots, Prof. Harvey added, because currently not enough new pilots are entering the industry to make up for those who are aging out of the profession, and who left during the pandemic.
“That must be in the forefront of airline management’s mind, because of this labour-supply problem that they’ve got,” he said.
The pay raises could eventually lead to higher fares, but Canada does not have as much competition in the airline industry, ticket prices are already high and Air Canada likely will have room to absorb some of the added costs, said Ambarish Chandra, an economics professor at the University of Toronto who has done research on competition and pricing in the airline industry.
“Generally, firms with market power are less likely to pass on cost increases to customers than firms that face more competition,” Prof. Chandra said in an e-mail to The Globe.
The Canadian Chamber of Commerce welcomed news of the tentative agreement, and said it hopes the deal is ratified.
This is the first time Air Canada’s pilots have negotiated as part of ALPA, which represents 78,000 pilots at 41 U.S. and Canadian airlines. In 2023, ALPA’s WestJet pilots ratified a four-year contract with raises of 24 per cent. Delta Air Lines’ pilots got 34 per cent over four years and their United Airlines counterparts received 35 to 40 per cent over the same term.