BUSINESS
09/20/2011 02:01 EDT | Updated 11/19/2011 05:12 EST

Air Canada Strike Averted As Airline, Union Reach Deal

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MONTREAL - Air Canada reached a tentative contract deal with flight attendants Tuesday, averting a strike that would have severely disrupted operations at Canada's biggest airline.

The Canadian Union of Public Employees said it is recommending Air Canada's 6,800 flight attendants accept the deal, details of which won't be made public until after a vote is held.

"It's business as usual and customers can continue to make their travel plans on Air Canada with confidence," Susan Welscheid, Air Canada's senior vice-president of customer service, said in a statement.

In August, the Air Canada flight attendants had resoundingly rejected a tentative deal CUPE negotiated with the airline, forcing the two sides back to the drawing board. The key areas of dispute were wages, pensions, crew rest, working conditions and work rules.

The union's negotiating committee believes it has secured a deal this time that will win member approval in about 17 days.

"The company was pretty adamant about not giving us what we wanted and I think we achieved probably 80 per cent of what our members wanted," union president Jeff Taylor said in an interview.

CUPE said it will hold meetings of its membership in Vancouver, Calgary, Toronto and Montreal beginning in about a week.

Taylor wouldn't say what role an arbitration ruling that creates a hybrid pension plan for new customer service hires had on flight attendant talks.

But he said the flight attendant agreement will probably put some pressure on the airline's other unions.

The deal resolves many of the work rule issues that flight attendants have complained about and is a good start to recovering what employees say they lost over the last decade, he added.

"I think it's unrealistic to think you could get everything that you lost over 10 years but I think we've managed to do something fairly significant here."

A strike deadline had been set for just after midnight Wednesday, though federal Labour Minister Lisa Raitt had warned she would introduce back-to-work legislation if the two sides didn't reach a deal by then.

Minutes after the deal was announced by the union, Raitt stood in the House of Commons to call on union members to ratify the agreement.

"The objective of the legislation that we put on notice yesterday has been achieved and we are so very pleased that air service for Canadians will be protected," she said.

In a later statement, Raitt said the tentative contract will help protect jobs and the economy and avoid a strike that would have hurt many Canadians.

"With the global economy still very fragile, our government is committed to protecting Canada's economy," she said.

"I am pleased that Air Canada and CUPE have come to an agreement that will avoid a damaging work stoppage without interruption to services to Canadians."

Yvon Godin, the Opposition NDP's labour critic, said he's pleased a deal was reached without a strike.

"This shows collective bargaining can work. Canadians can be assured New Democrats will not let (Prime Minister Stephen) Harper quietly take away the rights of working Canadians without a fight from the Official Opposition."

A walkout in June by the airline's customer service agents lasted just three days before a deal was reached under a threat by Raitt that she would legislate them back to work.

The Air Canada deal with its flight attendants was announced soon after the two sides resumed face-to-face talks and hours after they broke off negotiations in the middle of the night.

It prompted Air Canada's (TSX:AC.B) shares to soar nearly seven per cent, gaining 11 cents to $1.70 in Tuesday trading on the Toronto Stock Exchange.

The parties were called back to the table by mediators early in the afternoon to deal with three outstanding issues. Talks broke off Monday evening several hours after the union presented an offer.

The airline had begun to initiate parts of a plan to continue flying through a strike by contacting passengers and changing some of the flights operated by its regional partner Jazz (TSX:CHR.B).

Industry observers believed it would use trained managers and office personnel to maintain flights on its most lucrative routes.

Before a deal was reached, passengers at Toronto's Pearson International Airport were worried about the impact of a strike on their own travel plans.

The union held rallies at Parliament Hill in Ottawa and other locations as a show of support.

Sal Occhiuzzi, 54, a flight attendant for 31 years, said workers just wanted a fair deal that will allow them to recover some of the money lost in the last decade.

"We helped the company out when things were tough and we all gave a lot and it's time for the company to give a bit back," he said.

Banging drums and toting signs, flight attendants rallied at the country's largest airport, backed by several other of the airline's unions.

Taylor said flight attendants received words of support from passengers aboard aircraft.

And he said an email from Air Canada's Welscheid, in which she urged flight attendants to buck up and accept the unpredictable nature of their jobs, backfired and "fuelled the fire" with already upset employees by showing the company wasn't listening to them.

Participation of employees on social media such as Facebook also put pressure on both sides by giving employees a new forum to express their opinions.

"They complained, we ramped it up and here we are today," Taylor added, noting that flight attendants have the power to recall the executive if they reject a deal for the second time.