Air Canada, Unions Agree Deal On Pension Funding

Air Canada said it has completed tentative agreements with all its unions on a pension funding moratorium.

The cash-strapped carrier reached agreements on a 21-month pension funding moratorium and on labor stability with the Air Canada Pilots Association (ACPA) and Canadian Union of Public Employees (CUPE).

Canada's largest airline said the agreements call for 15 percent equity ownership of the company to be issued to a trust for the benefit of unionized employees, with proceeds of a sale to be contributed to the pension plan deficit.

The company said pension agreements also include a moratorium on past service contributions for a 21-month period and fixed payments of USD$150 million, USD$175 million, and USD$225 million in 2011, 2012 and 2013, respectively.

ACPA represents about 3,200 pilots and CUPE represents about 6,700 flight attendants.

Air Canada, which is looking to secure financing to help it ride out one of the worst downturns in the airline industry's history, reached tentative deals with three of its unions last week.