03/07/2012 01:40 EST | Updated 06/06/2012 06:12 EDT

Air Canada Strike On March Break? Largest Union Serves Strike Notice For March 12

TORONTO - Air Canada's biggest union says it is threatening to strike just as the busy March Break travel season gets under way because its members are angry over what they consider the airline's refusal to deal with wage and pension issues.

Union vice-president Dave Ritchie said the machinists, cargo agents and baggage handlers rejected a tentative deal late Tuesday because Air Canada (TSX:AC.B) hasn't addressed their pension concerns, especially after they agreed to millions of dollars in cost cutting to help the airline restructure.

"In my 40 years of collective bargaining, I have never seen the level of anger that I have seen in the membership at Air Canada," Ritchie said Wednesday at a news conference in Toronto just hours after the union served notice of its intention to strike.

Ritchie said the negotiating committee underestimated the anger of its membership, who rejected the tentative deal by a 66 per cent margin. Of particular concern are wages and a sizable pension deficit, which the union says Air Canada has not dealt with, despite the sale of $2 billion in assets.

The union had already agreed in 2009 to defer payment on its pension plan until 2014, but the company is asking for $350 million in pension concessions, while top executives continue to be paid handsomely, Ritchie said.

The International Association of Machinists and Aerospace Workers said its 8,600 members will walk off the job if they don't get a new deal by 12:01 a.m ET on Mar. 12.

"If we hit the lines, this airline is grounded," Ritchie said.

"Unfortunately, the public is going to be inconvenienced and I can understand that but you know what my membership has suffered for 10 years," he said.

If the union were to strike, flights would have to be grounded because its members provide crucial services such as fixing and de-icing planes, Ritchie said. The union members last went on strike in 1987, an action that halted service at the airline for about 20 days.

Many Air Canada workers, including a pilots union that is also currently in negotiations, are trying to win back pay and concessions they gave up to help the airline restructure under bankruptcy protection in 2003 and 2004.

Ritchie accused the company of failing to negotiate an acceptable agreement, while betting on the federal government's recent willingness to intervene in labour disputes at the airline.

"I guess their pattern is that 'thank God for the government because they're going to make sure that these employees don't get what they're deserving either'," he said.

"I say shame on both of them if that's the case. Allow collective bargaining to take place and allow our membership to have some dignity and respect on the job."

Ritchie said he hasn't been in contact with Labour Minister Lisa Raitt, who has moved swiftly in the past to intervene in labour disputes at the country's biggest airline, but added he hopes she will allow the parties to negotiate an acceptable agreement.

"I am pleading with the minister — let us do our job, bring air Canada back to the table and let them think that you are not going to legislate us," he said.

Raitt said the government is taking the threat seriously and is concerned a strike would disrupt the travel plans of thousands and have a big negative impact on the economy.

"This is a particularly bad time for thousands of families," Raitt said in an emailed statement.

"We encourage both parties to avoid a work stoppage and restore confidence for the travelling public and Canadian job creators that rely on commercial air services."

Duncan Dee, Air Canada executive vice-president and chief operating officer, attempted to downplay the possibility of travel chaos should there be a strike.

"Should a settlement not be reached and the IAMAW commences job action, the airline will endeavour to minimize inconvenience to its customers," Dee said in a statement.

"The lines of communication remain open and we are hopeful that there remains sufficient time to avoid a work disruption."

Interim NDP leader Nycole Turmel urged the government not to step in to end the conflict before it has reached at least the mediation stage.

"We feel sorry for the people who might be affected by the negotiation at Air Canada, but for us it is clear we need to let go the process to make sure that everything has been done to resolve the problems," Turmel said.

The Conservative government's recent history of intervening in Air Canada labour disputes, however, suggests it's not likely Ottawa will stand idly by.

Last month, Raitt — insisting a work stoppage would not be in the best interests of the fragile Canadian economy — stepped in to impose a six-month mediation process after the airline's pilots voted overwhelmingly in favour of a strike.

In September, the airline reached a deal with its flight attendants after a strike vote that prompted Raitt to warn of back-to-work legislation if a deal couldn't be reached. In June, a similar threat ended a walkout by the airline's customer service agents after just three days.

The latest sign of labour trouble came after Air Canada (TSX:AC.B) workers rejected a tentative contract settlement signed in February and gave their union a 78 per cent strike mandate.

In its financial report issued last month, Air Canada said it lost $60 million in the fourth quarter of 2011 and $249 million for the year.

The airline is Canada's largest domestic and international full-service airline providing scheduled and charter air transportation for passengers and cargo to more than 175 destinations on five continents.

It is the world's 15th largest commercial airline, providing service to more than 32 million passengers a year.