September 16, 2008 / 8:57 PM / in 9 years

Air Canada cabin crew union loses severance bid

CALGARY, Alberta (Reuters) - The union representing Air Canada’s ACa.TO flight attendants said on Tuesday it lost a bid to win severance for members who will be laid off in an upcoming round of cuts after the airline indicated layoffs would be temporary.

A government-appointed arbitrator declined to award severance packages for flight attendants who opt to leave the carrier or supplemental income for those who relocate within the company or enter job-sharing arrangements, said the Canadian Union of Public Employees.

Air Canada said in July that it will lay off more than 600 flight attendants. It is part of a plan to shed 2,000 jobs and cut capacity by 7 percent to cope with high fuel prices and slackening travel demand.

The airline has said it will cut 300 cabin crew jobs as it reduces long-haul flights from Vancouver and closes bases in Winnipeg, Manitoba, and Halifax, Nova Scotia.

The union, which has 7,200 members, opposes the base closures.

It said the arbitrator’s ruling will only reduce the impact of the cuts on a small number of flight attendants.

“The financial resources available for the flight attendants affected by the cuts and closures will provide minimal relocation support, some commuting assistance and a job sharing option, but not for all those choosing to stay with the airline,” CUPE said in a statement.

It said Air Canada’s total cost of the adjustment package will be C$5.5 million ($5.1 million) to gain a total annual saving of C$33 million.

CUPE said part of the difficulty in determining the impact on employees was that the airline began the process saying the cuts would be permanent and changed its position to term the layoffs temporary.

($1=$1.07 Canadian)

Reporting by Jeffrey Jones; editing by Rob Wilson

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