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Deal provides moratorium on funding the airline’s $3 billion pension shortfall for 21 months and averts Air Canada from seeking bankruptcy protection.
Toronto (15 July 2009) – The members of the International Association of Machinists and Aerospace Workers (IAMAW) employed at Air Canada have ratified an agreement with the national airline.
More than 60% of IAMAW members voted in favour of a tentative deal that freezes wages and places a moratorium on funding its $3 billion pension shortfall for 21 months at the cash-strapped airline. The IAMAW is the last of Air Canada's five unions to do so. It is the largest union at Air Canada with 12,300 members, representing technical, maintenance and operational support workers.
The union had previously rejected Air Canada’s proposal after the airline’s other unions had signed on.
The majority of the membership has spoken in favour of this agreement so we can now move forward knowing our pensions, our contract, our benefits and our jobs are protected for the next 21 months,” said IAMAW District 140 President and Directing General Chairperson Chuck Atkinson.
The agreements between IAMAW, Air Canada’s other four unions and the airline were negotiated after Air Canada announced earlier this year that it may head into bankruptcy protection. It says it needs emergency financing of hundreds of millions of dollars as well as relief from its pension obligations. Its current pension deficit is $3-billion.
The Canadian government has said it will provide up to $600-million in financing to the airline, but on condition that employees offer up monetary concessions, including on pensions. The company wants to suspend most payments to the pension plan for the next 21 months.
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