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Air Canada strike up in air
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July 7, 1999: 6:22 p.m. ET
Talks between carrier, union continue as midnight strike deadline looms
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NEW YORK (CNNfn) - Air Canada International and the union representing 5,100 of its flight attendants continued last-minute negotiations Wednesday in an effort to avoid a strike that could disrupt travel plans for thousands of Canadian and international fliers.
Representatives for both groups remained inside closed-door quarters in a downtown Ottawa hotel negotiating the contentious issue of employee pensions, the last leg of what could spell a deal for the flight attendants. The union is also trying to iron out smaller issues dealing with working conditions, said union spokeswoman Catherine Louli.
The airline division of the Canadian Union of Public Employees (CUPE) can legally strike at 12:01 a.m. Thursday, something Louli said the union will try to avoid if it possibly can. While progress has been "painstakingly slow" since talks between the two sides began almost 10 months ago, Louli said negotiations had reached "a slight breakthrough."
As of Wednesday afternoon both sides were still at the bargaining table negotiating the pension issue. Air Canada flight attendants currently earn a maximum pension of around C$22,000 a year after putting in 35 years of service. Air Canada had offered a one-time retirement allowance of up to C$12,383 in addition to that package, which was rejected by voting members last week.
Seeking alternatives
The Montreal-based airline is already throttling back its operations to avoid the chaos and expense of being left with 5,100 fewer staff Thursday morning, a lesson it learned from a crippling 13-day strike by its 2,100 pilots almost a year ago. That strike cost the airline C$250 million (US$170 million) in operating losses in 1998.
A full-blown strike at Air Canada would send the 60,000 passengers it services daily scrambling to find alternative arrangements on other carriers, including arch-rival Canadian Airlines.
Canadian Airlines said it will add additional planes to its more popular routes - such as the Toronto-Ottawa-Montreal triangle popular with business travelers -, though it pointed out that more than 80 percent of its flights are already near or at capacity.
Still, some travelers will get to where they need and want to go. All of Air Canada's smaller partners, including Air Ontario, Air Nova, Air Alliance and AirBC, will continue to offer local services between major cities throughout the country.
And other Air Canada partners, including United Airlines, Lufthansa, SAS, Air New Zealand, EVA Air and Royal Jordanian Airlines will continue to operate their regular routes in the event of a strike. Air Canada connections to those flights, however, will not take place, CUPE said.
Air Canada has also negotiated agreements with most major airlines -- including UAL Corp.'s United Airlines, Delta Air Lines Inc., Northwest Airlines Corp., Continental Airlines Inc., America West Holdings Corp. and many international carriers -- to honor Air Canada tickets as long as seats are available.
The airline is also offering passengers with discount fares for travel July 8-14 to exchange or refund their tickets without penalty in the case of a strike.
Coffee or Tea?
It's more than just the lack of in-flight hospitality that will ground domestic and international flights.
Because of federal regulations recently unveiled to better train Canadian flight attendants, it would be "impossible" to train enough attendants to replace those on strike, Louli said. Flight attendants account for more than one fifth of Air Canada's entire payroll. The average number of employees at Air Canada was 22,837 in 1998, according to company figures.
To be sure, a strike could quickly lead to temporary layoffs in other areas of the company as other departments and services sit idle, said Air Canada spokeswoman Laura Cooke.
"In the event of a strike there would be an impact on employees in terms of overall numbers," she said. "The airline is considering deploying idle workers to other areas that will undoubtedly require more workers, such as customer service, but right now it's uncertain. We're still at the negotiating table."
Baggage handlers, mechanics and pilots of the 152 planes Air Canada currently has in service would be the most likely layoff targets should a strike occur. Those employees could receive notice of their temporary hiatus as early as Friday.
Air Canada (ACNAF) shares rose 1/16 to 2-5/8 Wednesday on the Nasdaq stock exchange and were unchanged at $6.35 on the Toronto Stock Exchange. 
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