RM Issue #030602
Air Canada shares gain after deal with pilots
Last Updated Mon, 02 Jun 2003 18:36:29
TOROTNO - Shares of Air Canada (TSX:AC) got a lift on Monday in the wake of a last-minute cost-cutting deal between the airline and its pilots.
After being halted on Friday, Air Canada's
shares gained almost 15 per cent on Monday. The stock added 25 cents to close at $1.92 on the TSX.
With the deal with its pilots, Air Canada has cut about a third from its $3 billion annual wage bill through a series of deals with its 40,000 employees, CEO Robert Milton said Sunday.
The airline will save $1.1 billion a year by cutting its staff and paying those who remain less.
The 3,100-member Air Canada Pilots Association was the last union to come to terms with the airline.
The two sides had a midnight Saturday deadline, but their deal wasn't announced until around 3 a.m. Sunday.
"It was just a very long
night and hard bargaining by both sides," said Justice Warren Winkler, who had been appointed to help the carrier and its unions negotiate the cutbacks.
"At the end of it, everyone was relieved that they've saved their company, saved their jobs and most of all, I think, saved their pensions."
The deal means a court hearing that had been scheduled for Sunday has been cancelled. That hearing might have led to the airline going bankrupt.
Canada's dominant airline had sought bankruptcy protection April 1. It has been losing $5 million a day.
Without the pilots, members of other unions might have balked at ratifying the cost-cutting deals they negotiated.
Terms of the pilots' agreement weren't made public immediately, but the company had been seeking the elimination of 821 jobs and wage rollbacks.
Written by CBC News Online staff