Air Canada seeks pension relief, union bristles
TORONTO (Reuters) - Air Canada said on Monday it was seeking support from its unions for "a moratorium and other conditions" on funding its more than C$3 billion ($2.5 billion) pension deficit, but at least one of the unions warned against gutting its pension plans.
Concessions from Air Canada's unions, which represent around 18,000 of its employees, are widely seen as crucial to keeping the country's biggest airline from re-entering bankruptcy protection.
Air Canada said in a statement the moratorium would allow it to establish financial certainty over the next several years and help it maintain its defined benefit pension plans.
But the Canadian Auto Workers union, which represents about 4,500 unionized staff at the airline, demanded on Monday that the company continue funding its pension plan.
"If the company insists on getting rid of the pensions, they'll have the fight of their life, by not only the CAW, but all the unionized employees of Air Canada," said Leslie Dias, president of CAW Local 2002.
Dias said the last time Air Canada went into bankruptcy protection, in 2003, CAW members gave up the equivalent of 20 percent of the overall labor costs, and the company is still in dire straights.
Cameron Doerksen, aerospace analyst at Versant Partners, said funding its pension deficit is a "significant problem" for Air Canada but so are the large debt repayments the airline faces as well as the renegotiation of several union contracts.
"All three of those things combined result in a significant degree of uncertainty around Air Canada," Doerksen said.
Air Canada spokeswoman Angela Mah declined to comment further on Monday's brief statement. Continued...