Disgruntled Air Canada workers hold a rally at Pearson Airport in Toronto on Thursday June 9, 2011.
Air Canada is vowing to press ahead with its full flight schedule as a strike looms this week.
The country's largest carrier is recommending that passengers obtain boarding passes online, show up early at the airport on Tuesday and avoid checking in bags at the counter, if possible, to help cope with long lineups.
Air Canada is preparing to deploy hundreds of managers to run airport check-in services, aiming to stick to its slate of flights, despite being short-staffed. "Should a strike occur, we have non-unionized staff trained and available to ensure a continued operation," said a letter posted on the airline's website by Susan Welscheid, Air Canada's senior vice-president of customer service.
A strike will take effect at 11:59 p.m. on Monday unless management drops proposals to revamp pension plans, said the Canadian Auto Workers union, which represents about 3,200 airport customer-service agents and 600 call-centre staff. Some of the phone calls to Air Canada customer-service lines will be rerouted to call centres in Florida and Europe under the airline's contingency plans.
Air Canada is seeking to gut defined-benefit pensions for existing employees while proposing to place new hires on defined-contribution plans, which don't provide a guaranteed level of payout upon retirement, said CAW national representative Jo-Ann Hannah.
New retirees will suffer, said Ms. Hannah, who estimates that a CAW member, aged 55 with 30 years of service, would see the monthly defined-benefit pension payout drop from a current entitlement of $2,360 to $1,130 a month, or a 52-per-cent cut.
But management disagrees with the CAW's estimate that new retirees will see pensions chopped by an average of 40 per cent, saying the reduction will be less severe.
Air Canada warns that its defined-benefit plans are in jeopardy because of the heavy burden of the company's $2.1-billion pension solvency deficit. A 21-month moratorium on the carrier's past service contributions expired at the end of 2010.
Air Canada forecasts that it will be on the hook for $1.6-billion in pension-funding contributions over the next four years. Company payments are forecast to soar in 2014 because a cap on pension contributions will expire at the end of 2013.
Existing retirees will continue to receive their regular cheque amounts, but management argues that the airline simply can't afford to maintain an excessively generous pension system for new retirees.
"We currently have employees who are eligible to retire from Air Canada at less than age 45 - this is a good example of a provision that is simply no longer sustainable in an era where life expectancies are over 80 years," the airline said in a letter to workers, riling labour leaders.
CAW members aged 55 with 30 years of service at the airline earn $51,500 a year. Factoring in company pension contributions and various benefits, each veteran member of the CAW will cost Air Canada $74,000 this year, according to the letter.
In issuing a strike notice after 10 weeks of contract talks, the CAW hopes to pressure management to withdraw the pension proposals and also exclude the CAW from any concessions sought for launching a low-cost carrier.
Federal Labour Minister Lisa Raitt said she's closely monitoring the dispute. "I am concerned about the potential impact of a work stoppage on Canadians and on Canada's economic recovery," she said in a statement.
Brent Jang