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Thursday, Sep. 3, 1998
60,000 grounded as Air Canada's pilots call strike
Two sides differ on wage increases just before busy Labor Day weekend
By EDWARD ALDEN
Scripps Howard News ServiceTORONTO -- Pilots at Canada's largest airline walked off the job Wednesday, grounding about 600 flights and leaving 60,000 passengers scrambling to make alternative arrangements.
The strike by 2,100 pilots at Air Canada comes ahead of the Labor Day weekend, traditionally one of the busiest travel weekends of the year. Air Canada handles about 60 percent of domestic air travel and more than 40 percent of flights between the U.S. and Canada.
Intensive negotiations to avert the strike failed late on Tuesday, with the two sides at odds over wage increases for the pilots.
Jean-Marc Belanger, the pilots' representative, accused the company of precipitating the strike by refusing to budge when the pilots agreed to halve their wage demands. They had been seeking a two-year deal with an 18 percent wage increase; Air Canada had offered 11 percent over three years. The sides were only a couple of percentage points apart when talks collapsed.
Air Canada urged passengers Wednesday to postpone travel plans as its ticket-holders could not all be accommodated on other carriers. The company has alliance arrangements with several airlines, including United Airlines and Lufthansa.
Competing airlines, including Canadian Airlines and Delta, also said they would honor Air Canada tickets.
The strike comes four days after 6,000 pilots at Northwest Airlines walked out, disrupting flights in the Midwest.
Jacques Kavafian, analyst with HSBC Securities, said the shutdown would cost Air Canada about $8.5 million a day and had already lost the company more than $19.8 million in profits as passengers booked with other carriers to avoid disruption.
The pilots say generous wage increases are in order as the company recently earned record profits after many lean years in the early part of the decade. Air Canada's net earnings were $281.8 million last year, nearly triple the previous record.
But Kavafian said that figure was inflated by one-off asset sales and an income tax rebate. The airline was struggling with high costs and was likely to see revenues drop with the slowing Canadian economy, he said.
Negotiations with the pilots have taken on added importance as Air Canada faces further contract talks later this year with its flight attendants and early next year with the machinists' union. Any settlement with the pilots is expected to set a precedent.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web