Air Canada Reaches Tentative Agreement

2nd Jun 2003

MONTREAL, June 1 /CNW Telbec/ - Air Canada confirmed that it had earlier
today reached a tentative agreement on labour cost realignment with the Air
Canada Pilots Association (ACPA) representing its 3,150 mainline pilots. With
this agreement Air Canada will achieve an overall labour cost saving of $1.1
billion annually on a consolidated basis.
“ACPA faced unique and complex issues and while the sacrifices agreed to
in the tentative labour agreement are painful, they are unavoidable to secure
Air Canada`s future,” said Robert Milton, President and Chief Executive
Tentative agreements were reached earlier last week with the
International Association of Machinists and Aeropace Workers (IAMAW)
representing 11,000 technical operations and airport ground service personnel,
CUPE representing 6,700 flight attendants, the CAW Airline Division,
representing 6,000 customer sales and service agents and crew schedulers and
CALDA, representing the airline`s 100 flight dispatchers. Tentative agreements
were also reached with all unions representing Air Canada Jazz employees - the
Airline Pilots Association (ALPA), CALDA, CUPE and Teamsters Canada.
“I salute Air Canada`s union leadership for doing the right thing under
trying circumstances to ensure the survival of this great airline,” said
Mr.Milton “I recognize what a difficult and unsettling time this has been for
all of Air Canada`s employees. A successful ratification of all the tentative
agreements will establish the foundation to move forward with lessors,
lenders, key suppliers and other stakeholders.
“Mr. Justice Warren Winkler conducted an extremely disciplined and
focused mediation process which took account of the urgency of reducing our
costs immediately within CCAA. This successful outcome could not have been
achieved within the necessary timeframe without his tireless efforts in
addition to those of Murray MacDonald of Ernst & Young, the Court-appointed
“With this significant hurdle in our restructuring behind us, I wish to
reassure Air Canada`s customers that it is business as usual and I encourage
them to continue booking Air Canada with confidence,” said Mr.Milton.
With the tentative agreements, the company will achieve $766 million
(including benefits) in labour cost realignment at the mainline carrier in
addition to $120 million to be realized from the non-unionized and management
ranks. Additional cost savings resulting from the realignment of the airline
to a smaller network are expected to generate $110 million. With the tentative
agreements in place, Air Canada Jazz will reduce labour costs by $110 million
for a total consolidated labour cost saving of $1.1 billion.
The labour cost reductions will be achieved primarily through
productivity improvements including job reductions and wage rollbacks. Details
of the agreements reached by the individual unions will be provided separately
by the unions to their membership. The agreements are subject to ratification.
Air Canada will initiate discussions in the coming days with its unions
outside of Canada with the objective of achieving appropriate cost savings.


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