Air Canada, unions reach cost-cutting agreement

0 Comments | Deseret News (Salt Lake City), May 27, 2003 | by Associated Press

MONTREAL -- Air Canada confirmed Monday that it has reached a tentative agreement with the CAW Airline Division, representing 6,000 Air Canada customer sales and service agents and crew schedulers at the mainline carrier.

Robert Milton, Air Canada's president and chief executive, said that with the agreement and tentative deals with two unions at Air Canada Jazz, the company had achieve $152.9 million in annual cost reductions from unionized labor groups.

Milton said the agreements are a "very significant step in ensuring the airline's survival.

The troubled airline said the cost reductions provided in the CAW agreement, which total about $109 million million a year, were reached primarily through productivity improvements including work force reduction and wage rollbacks.

The company didn't disclose details of the job and wage cuts. Pension benefits won't be affected under the agreement, which is subject to ratification by union membership.

Montreal-based Air Canada also said there has been progress in discussions with the International Association of Machinists and Aerospace Workers representing Air Canada's 11,000 machinists, CUPE representing 6,700 flight attendants and CALDA representing the airline's 100 flight dispatchers.

The deadline for Air Canada and its unions to reach negotiated agreements is Tuesday at 5 p.m. EDT.

On Saturday, Air Canada's Jazz regional unit and two of its unions reached tentative agreements that will cut the labor costs for the two unions by up to 48 percent, and would allow Jazz to cut other costs of about $42.6 million annually.

The airline filed for bankruptcy protection last month. It ended 2002 with a loss of $295 million, bringing the total to more than $1.1 billion since its last profitable year in 1999.