UPDATE 1-Air Canada shares jump after pension extension
* Shares up as much as 7.4 percent at C$2.76
* CIBC raises target
* Airline to pay C$1.4 billion over seven years
* Unions, retired employees support government decision
* WestJet "disappointed" with decision (Adds WestJet statement and source comment)
TORONTO, March 13 (Reuters) - Air Canada shares rose as much as 7.4 percent on Wednesday after it won a seven-year extension for the cap on special payments to erase its sizeable pension fund deficit.
Canada's largest airline, which won the extension on Tuesday over the objections of its smaller rivals, will have to pay a total of C$1.4 billion over seven years, or an average of C$200 million a year, with a minimum of C$150 million a year.
The payments are above those Air Canada originally requested and they come with a number of conditions.
A source familiar with the negotiations between Air Canada and the government said he did not expect management to have any concerns with the pension proposal, with the unions already lined up to support it. Continued...