October 6, 2014 / 3:08 PM / 5 years ago

Air Canada reaches tentative 10-year deal with its pilots

TORONTO (Reuters) - Air Canada ACb.TO has reached a tentative agreement on a new 10-year contract with its pilots’ union, 1-1/2 years ahead of the expiration of the current contract at Canada’s largest airline.

An Air Canada plane lands in front of a United plane at the Calgary International Airport in Calgary, Alberta, June 17, 2008. REUTERS/Todd Korol

The Montreal-based carrier said on Monday the new deal, which is subject to ratification by about 3,000 pilots, will allow it to accelerate its growth plans. Air Canada has been pushing expansion of its international flights and of Rouge, its low-cost vacation carrier.

A spokesman for Air Canada Pilots Association (ACPA), the largest professional pilots union in Canada, said it had been approached by the carrier to begin early negotiations for a new contract.

If ratified, the new contract will supersede the current contract, which was set to expire in April 2016. No dates for the ratification vote have been set.

“An early agreement with the pilots could bode well for other upcoming labor negotiations at AC, as the pilots are an important influencing group for the other AC unions,” said Canaccord Genuity analyst David Tyerman, who said the deal would be of unprecedented length if ratified.

Tyerman cautioned, however, that Air Canada reached an early tentative agreement with its pilots during talks for the current contract, but that that deal got voted down by the union and that a strike almost ensued.

“The current situation could be different, as we are not aware of AC seeking controversial terms,” he said.

The union said the new deal sets out compensation, benefits and other work rules for pilots until September 2024, but both sides declined to provide further details.

“This agreement marks a definite improvement in the relationship between Air Canada and its pilots,” ACPA President Craig Blandford said in a statement, adding that it gives members job security and fair compensation.

Shares of Air Canada, which also said on Monday that it flew more passengers in September than it did a year earlier, jumped nearly 6 percent on the Toronto Stock Exchange, before paring some of the gains. The stock was trading 4.3 percent higher at C$8.21 at mid morning.

The airline reported a load factor for September of 84.7 percent, up 1.5 percent from a year earlier, on a capacity increase of 7.3 percent, across all of its operations, including Rouge. Traffic grew 9.2 percent.

Editing by Jeffrey Hodgson; and Peter Galloway

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