06/13/2011 07:01 EDT | Updated 08/13/2011 05:12 EDT

Air Canada Strike: Deadline Nears As Talks Continue

THE CANADIAN PRESS -- MONTREAL - The union representing 3,800 Air Canada employees says it has tentatively reached agreement with the airline on some contract issues but the two sides remain far apart on key sticking points of pension and wages.

"We did a lot of work but it just seems to me that we should be moving a little bit quicker than we are right now," CAW president Ken Lewenza said in an interview.

He said the union is waiting for a response to its Sunday proposal that could avert a strike at midnight.

Lewenza said the union's proposal, which he declined to detail, would provide members with pension security and wage increases after a decade of uncertainty.

The national union leader said he's optimistic that a deal can be reached but acknowledged there's a "a huge gap" between the two sides on these two key issues.

"The demands on the pensions have diverted a lot of our attention but at the end of the day our members have had 10 years of significant sacrifices," he said.

"Now it's time to make some progress (and) wages are a big key to getting an agreement."

Air Canada (TSX:AC.B) declined to discusses the issues being negotiated, but said it is working to a settlement that "respects our employees and ensures Air Canada's long-term sustainability without a labour disruption."

The country's largest airline said it has prepared a contingency plan to continue operating a full schedule if there is a strike.

"We appreciate this situation may cause uncertainty for our customers," stated Duncan Dee, Air Canada's chief operating office.

In the event of a strike, the carrier urges passengers to check with its website because a high volume of calls could make long waits to get through to its call centres.

Self-service tools can be used for making bookings along with self-service check-in at airports.

Lewenza said a strike would invariably have an impact on Air Canada's operations.

"Anybody who thinks it's business as usual when 3,800 members are on strike, I don't think is being very realistic."

Federal Labour Minister Lisa Raitt has said she's concerned about the potential impact of a work stoppage on Canadians and on Canada’s economic recovery.

But the minister couldn't be immediately reached to comment on whether the Conservative government would be open to imposing back-to-work legislation.

Lewenza said he doesn't believe such action is warranted.

"I don't see this as an essential service, but the federal government does have a majority government and obviously they can basically do what they want to do but they should let the bargaining process work itself out."

On the Toronto Stock Exchange, Air Canada's shares dropped 6.2 per cent, or 12 cents, at $1.82 in afternoon trading.