Air Canada Reaches Cost Agreement

27th May 2003

MONTREAL, May 26 /CNW Telbec/ - Air Canada announced that it had reached
a breakthrough tentative agreement earlier today with the CAW Airline
Division, representing 6,000 customer sales and service agents and crew
schedulers at the mainline carrier.
“The process established by Justice Winkler has gathered significant
momentum,” said Robert Milton, President and Chief Executive Officer. “With
the CAW agreement following on tentative agreements reached with two unions at
Air Canada Jazz on Saturday, we have achieved $210 million of annual cost
reductions from unionized labour groups relating to Air Canada`s restructuring
under CCAA. I commend the CAW leadership for their decisive action under very
trying circumstances. The successful outcome achieved under the guidance of
Justice Winkler represents a very significant step in ensuring the airline`s
survival,” said Mr. Milton.
The cost reductions provided in the CAW agreement were reached primarily
through productivity improvements including workforce reduction and wage
rollbacks. The agreement is subject to ratification by union membership.
The company has agreed that pension benefits will be unaffected.
  Additionally progress has been made in discussions with the International
Association of Machinists and Aerospace Workers (IAMAW) representing Air
Canada`s 11,000 machinists, CUPE representing 6,700 flight attendants and
CALDA representing the airline`s 100 flight dispatchers.
Mr. Justice Warren Winkler was appointed on May 9, 2003 by Mr. Justice
James Farley of the Ontario Superior Court of Justice to facilitate Air
Canada`s labour cost restructuring under CCAA. On May 21, at Justice Winkler`s
request, Air Canada presented comprehensive proposals to its unions outlining
the specific cost reductions required by each labour group at Air Canada and
Air Canada Jazz. In order to accelerate the restructuring process, Justice
Winkler has set 5:00 p.m. E.S.T. May 27 as a deadline for the company and its
unions to reach negotiated agreements.


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