Air Canada asks Trudeau to step in as pilots threaten strike

Air Canada is asking Prime Minister Justin Trudeau’s government to intervene in contract negotiations with its pilots, seeking to avoid a shutdown of the airline next week.

The company is set to begin winding down operations Sunday, as talks with more than 5,000 unionized pilots appear to be at an impasse. Fifteen months of negotiations between Air Canada and the Air Line Pilots Association have stalled over wages.

The Montreal-based airline wants the government to request arbitration as soon as this weekend if there’s no breakthrough in negotiations. 

“Our goal is to reach a deal, but if there is no conclusion by Saturday, we ask the government to be ready to intervene to avoid these disruptions for Canadians,” Air Canada spokesman Christophe Hennebelle said Thursday in a phone interview. Arbitration is “a path that seems reasonable.”

The airline and the union are planning to meet Thursday, though Hennebelle said there’s no certainty of reaching an agreement “because the union refuses to moderate its wage demands.”

The airline has already started to turn away orders for cargo services, and some passenger cancellations may begin Friday to avoid customers being stuck abroad, Hennebelle said. 

The pilots’ union didn’t immediately respond to requests for comment, but has said it’s pushing to close a wage gap with its US industry peers. Labor Minister Steven MacKinnon’s office said in an emailed statement that it’s committed to the collective bargaining process.

The government can ask the Canada Industrial Relations Board to force arbitration. Last month, the government asked the CIRB to step in when employees at the country’s two largest railways were locked out. The board gave a ruling that sent workers back to the job within days. 

Air Canada offered to boosts the pay of pilots by about 30% within the next three years. The pilots haven’t received a raise since last year. The union will be in a position to issue a 72-hour strike notice on Sunday. Air Canada would be able to issue a lockout notice at the same time if there’s no deal.

Air Canada shares were up 2.2% to C$15.75 as of 11:33 a.m. in Toronto. 

A two-week strike by pilots may result in a real gross domestic product loss of C$1.4 billion ($1 billion), or C$98 million per day, according to Desjardins economists. “Air Canada is Canada’s leading air cargo carrier and largest airline,” LJ Valencia and Randall Bartlett said in a report. “A longer strike could have an even greater negative impact on the economy.”