MONTREAL — Air Canada’s hopes of pushing through cost-saving initiatives, including a low-cost carrier, were thrown off course Thursday when pilots rejected a tentative agreement.
The Air Canada Pilots Association said that 67 per cent of the votes cast by its members were against the agreement. Only about 100 of some 2,900 pilots failed to cast ballots.
The union will meet with members to assess particular concerns before returning to the bargaining table, said pilots association president Paul Strachan.
“We’ve got some internal work to do,” he said in an interview. “It’s going to take us a while and then, when we’re ready, obviously we’ll call Air Canada and hopefully we can resume talks.”
Internal consultations could take several weeks before the union’s Master Executive Council develops a new negotiating strategy.
“It would be premature to be rushing back right now...clearly there was a disconnect (with the membership) there, so we need to go and close that loop.”
The negotiating committee and Air Canada CEO Calin Rovinescu had urged members to accept the deal.
Rovinescu has told shareholders that Canada’s largest airline would only introduce a low-cost carrier next year if it can sustainably reduce labour and other costs.
Air Canada said the carrier expects to create jobs for 462 pilots, three times as many flight attendants and some airport and maintenance positions.
Strachan said the members vote is a repudiation of the deal and not the people involved. Pilots had previously voted to recall the council chairman.
The last contract expired March 31.
Air Canada (TSX:AC.B) issued a separate statement saying that it would reconvene with the pilots association with the goal of reaching a new agreement over the coming months.
“Air Canada confirms it is business as usual for the airline and that customers can continue to book Air Canada flights with confidence,” the company said.
Strachan said it’s premature to discuss what changes pilots will seek because they liked some parts of the tentative deal but not others.
On April 15, the union abruptly cancelled the process after pilots voiced concerns about certain terms, including those related to the carrier’s desire to establish a low-cost carrier and put new employees on defined contribution pension plans.
The decision to call for a new vote was made after the airline played hardball in the hope that the deal would squeak by in a vote.
Many members are fed up with hearing reasons why their compensation and pensions should be reduced by those who have stripped the airline of almost $4 billion in assets over the last decade, Strachan has said previously.
Cameron Doerksen of National Bank Financial said the pilots vote wasn’t surprising given the dissatisfaction voiced by members of late.
“It’s a setback,” he said Thursday.
When Air Canada reached an early deal with pilots, there was some hope that negotiations with its unions might be less challenging than they became, Doerksen said.
“But it’s relatively early stages here, so I think that there still appears to be some prospect of getting a deal done here, it’s just a matter of going back and working out the details again.”
Meanwhile, Air Canada’s focus will likely shift to airport and call centre employees who are expected to endorse a strike vote when the CAW releases results Friday.
The union, which is required to give 72 hours notice before a strike, had set a June deadline for a possible walkout. Unions often set dates for strike votes and strikes to increase pressure on employers to settle.
Air Canada’s shares closed down five cents, or 2.1 per cent, to $2.34 in Thursday trading on the Toronto Stock Exchange.