UPDATE 2-Air Canada wins final union backing on pension request

Thu Oct 25, 2012 4:54pm EDT
 
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* CAW says had little choice but to back request

* Air Canada pension deficit was C$4.2 bln on Jan. 1

* Finance Minister said pension request needed union backing

* Air Canada asking to limit payments to C$150 mln/year -CAW

Oct 25 (Reuters) - The Canadian Auto Workers union said on Thursday it would back Air Canada's request to the Canadian government for further relief on funding its deep pension deficit, becoming the final union at the airline to give its blessing to the proposal.

Bob Orr, assistant to national CAW President Ken Lewenza, said the union had little choice but to support money-losing Air Canada's request to extend a cap on its past service pension payments for another 10 years from 2014.

"With the pension payment being due in 2014, no one is under the illusion that Air Canada would have the money to make that payment," Orr said in an interview.

"We didn't want to get into a whole round of discussions around other cost-savings measures they would need in order to make the payment," he said.

Air Canada's pension deficit stood at C$4.2 billion ($4.23 billion) as of Jan. 1, largely because of extraordinarily low interest rates, and analysts say funding the plan under normal rules could threaten the airline's existence.   Continued...