Two of Canada’s largest airlines facing tough labour battles

MONTREAL — Two of Canada’s largest airlines are engaged in tough battles with their unionized workers after demanding concessions to reduce costs in the face of mounting fuel prices.

MONTREAL — Two of Canada’s largest airlines are engaged in tough battles with their unionized workers after demanding concessions to reduce costs in the face of mounting fuel prices.

Federal conciliators have been called in by two groups of employees to help iron out negotiated labour agreements and avoid strikes or lockouts.

Air Canada’s (TSX:AC.B) 3,800 sales and customer service agents represented by the Canadian Auto Workers first sought outside help in March. Now the union representing some 1,400 Air Transat flight attendants has made a similar move.

Nathalie Stringer, president of the Air Transat Component of the Canadian Union of Public Employees (CUPE), said the two sides have always settled their disputes without service disruptions.

“We are going in conciliation because we want to settle and we want to get on with the future,” she said in an interview.

But Stringer said the union can’t accept the major concessions being demanded by the airline, a subsidiary of Transat AT (TSX:TRZ.B).

The two sides have held 24 bargaining sessions since September. Flight attendants have been without a contract since Oct. 31.

Stringer said it’s unclear why flight attendants “should tighten their belts” when Transat had a great year in 2010 and has earned $73.3 million in profits over the last two quarters.

She said the employer said it wants to enhance its “operational flexibility” by increasing the number of hours on duty each day to 15 hours from 14 and lower wages for new recruits.

Flight attendants are only paid while an airplane’s engines are running. But they must be on duty one hour before a flight (80 minutes for international flights), between flights and 15 minutes after a plane stops at the airport gate.

New hires are currently paid on the basis of 65 hours of flying time per month, or just over 16 hours per week, at a rate of $27.07 per flying hour. The union says that amounts to just $11.07 an hour if extrapolated to a 40-hour week and the company wants to reduce that to $9.65.

“They want to bring their wages so low it will practically be minimum wage,” Stringer said.

Transat declined to comment on the labour dispute but noted that its profits last year were very thin.

“They paint us like we’re doing a lot of profit every year but last year our profit was 1.7 per cent, so we’re not talking about big profit here in the industry,” said spokesman Pierre Tessier.

The unions recognize that the airline business has high fixed and capital costs and low operating margins. But they contend workers have already done a lot to help carriers weather the various storms that have arisen over the last decade, ranging from the 2001 terrorist attacks, SARS, fuel price spikes and a global recession.

“It’s a very, very cyclical industry, a lot of things have been piled on top and I think employees are exhausted,” said Capt. Paul Strachan, president of the Air Canada Pilots Association.

The group representing 3,000 pilots has decided to return to the bargaining table after abruptly cancelling a ratification vote last week. Union members had raised numerous concerns about the tentative deal struck by negotiators for the two sides.

Strachan declined to detail the main terms it wants to see amended, but noted concerns had been raised about proposals to change pension plans for new hires and the potential introduction of a low-cost carrier.

Pilot frustration led to an online petition seeking the recall of Bruce White, chairman of the union’s master executive council. A 10-day recall vote began Thursday.

“Our group of people is probably the only group of professionals in the nation that is working for considerably less money today than they were 10 or 12 years ago, so I think that’s the angst you’re seeing,” Strachan said of general employee unease.

Airline analyst Robert Kokonis of AirTrav Inc. said carriers are using rising fuel prices and uncertainty about the impact on travel demand to press for concessions.

“Perhaps it’s a godsend for the carriers, the higher fuel will give them a little bit of ammunition to push back,” he said.

Kokonis doubts that strikes are likely, but expects labour disputes will remain unresolved through the peak summer travel season.

On the Toronto Stock Exchange, Transat shares were unchanged at $11.70 in afternoon trading Thursday. Air Canada was down two cents at $2.43.

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