Air Canada pilots are concerned that the airline's launch of a low-cost carrier could threaten their job security and working conditions, the union said Tuesday as the plans came closer to fruition after an arbitrator sided with the airline in a labour dispute.
A federal arbitrator chose Air Canada's final offer Monday, imposing a five-year collective agreement that includes, among other things, provisions allowing the airline to create a budget carrier.
The airline says the agreement, effective until April 2016, will give it the flexibility it needs to compete with budget carrier WestJet, which operates mostly domestic flights and doesn't have Air Canada's issues with union and pension woes.
"Another piece has fallen into place with this arbitration decision," said Air Canada spokesman Peter Fitzpatrick. "The industry has changed and a lot of low-cost competition has arisen around the world and in Canada. It's no secret WestJet has a fairly significant cost advantage over Air Canada, so we need to create a vehicle that will be competitive."
Air Canada's top executives have said the launch of a discount carrier is a top priority, but details about the airline's plans are sparse. "We're looking at our options," said Fitzpatrick. "Our president has said repeatedly that we intend to participate in this market, and how we'll do that is really what we're working on now."
Although Air Canada's offer indicates the low-cost carrier will employ workers from the Air Canada Pilots Association, the union's president says it will be "under drastically different terms of employment."
Paul Strachan said those new work rules would include longer hours.
Air Canada's offer also has provisions that allow the airline to remove the entire Embraer fleet of planes from the main line if a low-cost carrier is created, which may result in job losses for pilots, he added. Air Canada's offer includes pay increases for the pilots: two per cent in 2011, 2014 and 2015, five per cent for 2012 and three per cent for 2013.
