Air Canada reaches deal with machinists

MONTREAL — Air Canada (TSX:AC.B) has reached a tentative agreement with its 8,600 mechanics, baggage handlers, and cargo agents — the carrier’s biggest union.

MONTREAL — Air Canada (TSX:AC.B) has reached a tentative agreement with its 8,600 mechanics, baggage handlers, and cargo agents — the carrier’s biggest union.

Details of the agreement will not be released until the union members ratify the deal and Air Canada’s board approves the contract, Canada’s biggest airline said Friday.

The tentative deal comes one day after the union representing the airline’s pilots called for a strike vote. Air Canada has had rocky labour relations for years but the situation with its unions has deteriorated in the last 12 months or so as the carrier tries to cut costs due to rising fuel bills and increased competition with rivals WestJet Airlines (TSX:WJA) and Porter Airlines.

WestJet plans to start up a regional carrier in Canada and Air Canada has been trying to set up a low cost carrier for holiday travellers but has run into opposition from its unions, especially the pilots.

A strike mandate after the scheduled five days of voting would put the airline’s 3,000 pilots in a legal strike position early next Friday.

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