Air Canada Reaches Impasse in CAW Discussions

20th May 2004

Air Canada announced that it has reached
an impasse after 16 days of discussions with the CAW aimed at achieving the
CAW’s share of the $200 million cost savings to be achieved in order to
satisfy the labour condition in the Deutsche Bank Standby Purchase Agreement
and the GE Capital Aviation Services (GECAS) Global Restructuring Agreement.“There was insufficient movement in the union’s response to the Company’s
offer of May 17 to warrant a continuation of discussions,” said Paul Brotto,
Executive Vice President, Cost Control and Planning. “The Company’s proposal
to the CAW is consistent with what was agreed to by all other employee groups
at Air Canada and Air Canada Jazz in terms of productivity and wage
reductions. We salute the leadership of ACPA, CUPE, the IAMAW, CALDA, and the
Jazz unions, ALPA, the Teamsters, and CALDA for the tremendous work
accomplished in the past few weeks. We are too close to our goal to turn back.
And so we will immediately commence discussions with Deutsche Bank and GECAS
to determine next steps.”
  Agreements were reached with the International Association of Machinists
and Aerospace Workers (IAMAW) representing 14,500 technical operations and
airport ground service, finance, cargo and clerical personnel, the Air Canada
Pilots Association (ACPA), representing approximately 3000 pilots at the
mainline carrier, the Canadian Airline Dispatchers Association (CALDA),
representing flight dispatchers. and CUPE, representing approximately
5,800 flight attendants. Tentative agreements have also been reached with all
unions representing Air Canada Jazz employees - the Airline Pilots Association
(ALPA), CALDA, CAW, and Teamsters Canada. Air Canada management and non-
unionized staff have also contributed their share of the $200 million cost
savings target.
  The CAW Airline Division represents approximately 5000 customer sales and
service agents and crew schedulers at Air Canada and approximately 1400
employees at Air Canada Jazz comprised of customer service agents, maintenance
and engineering staff and crew schedulers.
  On May 14, 2004, Air Canada and The Office of the Superintendent of
Financial Institutions (OSFI) reached an agreement which satisfies the pension
funding relief condition in the Deutsche Bank Standby Purchase Agreement,
eliminating one of the two remaining conditions that must be satisfied.



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