May 7, 2012 / 8:13 PM / 5 years ago

Air Canada, pilots start 10-day talks on Thursday

Passengers walk past Air Canada planes on the runway at Pearson International Airport in Toronto April 13, 2012.Mike Cassese

(Reuters) - Air Canada and the union representing its 3,000 pilots will start 10 days of talks on Thursday under a Canadian government-appointed arbitrator, according to an internal pilots memo, in a final effort to agree on a new labor contract.

If they fail to reach an agreement in that time-frame, arbitrator Douglas Stanley has less than 90 days to choose either the pilots' or the airline's offer, whichever he deems best, and impose it on both sides.

Air Canada and the Air Canada Pilots Association (ACPA) have been in on-again, off-again talks for more than a year. Fractious relations almost provoked an Air Canada lock-out of the pilots, while some of the pilots held an illegal strike last month.

"A negotiated settlement is by far the best option for both parties," said Captain Jean-Marc Belanger, chairman of the master executive council of ACPA, in a memo obtained by Reuters.

ACPA declined to comment. Air Canada could not immediately be reached for comment.

Pilots have been without a contract since March, 31 2011.

Loss-making Air Canada wants to set up a discount airline to help it cut costs and boost revenue. Its unions oppose the plan, fearing that their benefits and job security could be at risk.

The Canadian parliament passed a law in March that sent separate disputes with the pilots and with its machinists to binding arbitration. That prevents the machinists from striking, and the airline from locking out the pilots.

Reporting By Nicole Mordant in Vancouver

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