Air Canada reaches last-minute agreement with pilots' union and avoids strike

Air Canada announced early Sunday that it had reached a last-minute, preliminary agreement with the pilots' union on a new four-year collective bargaining agreement that could avoid a strike or lockout in the near future.

Before the tentative agreement was reached, Canada's largest airline had been preparing to gradually cancel flights over three days and to cease operations completely as early as 12:01 a.m. EDT (4:01 a.m. GMT) on Wednesday, September 18.

Air Canada and Air Canada Rouge, which operate nearly 670 flights daily with around 110,000 passengers and cargo, will now continue their operations as usual, the airline said.

Air Canada said in a statement that the terms of the new agreement with the Air Line Pilots Association (ALPA), which represents more than 5,200 pilots, would remain confidential until members vote on ratification, which will be completed later next month.

ALPA said in a separate statement that its leadership had approved the tentative agreement with Air Canada for ratification by members.

The two sides have been negotiating a new collective agreement for 15 months. The pilots are demanding wages that would reduce the pay gap with their colleagues at major US airlines such as United Airlines.

Labour Minister Steve MacKinnon said in a post on X that travel disruptions for Canadians were avoided thanks to the hard work of the parties and federal mediators.

Prime Minister Justin Trudeau said Friday the Canadian government would not intervene to end the dispute, as it did within 24 hours last month to end a strike at the two largest railroads, Canadian Pacific Kansas City and Canadian National Railway.

Air Canada had previously offered a pay increase of more than 30 percent and improved pension and health benefits, but the union said the proposal was not good enough for its members, who had previously worked below the wages and quality of life provisions negotiated in 2014.

Pilots at American airlines have negotiated substantial pay increases in their new contracts over the past two years as a result of a travel boom and staff shortages. United's new pilot contract, for example, included pay increases of around 42 percent.

As a result, some United pilots now earn 92 percent more than their Air Canada colleagues, according to data from the pilots' association. In 2013, the pay difference was only three percent.