Air Canada (TSX:AC.B) and the union representing its pilots have reached a tentative four-year collective agreement, averting a strike or lockout.
The airline was preparing to start cancelling flights ahead of a total shutdown of its operations as early as September 18.
The terms of the tentative deal are confidential pending a ratification vote by members of the Air Line Pilots Association (ALPA) and the airline’s Board of Directors, Air Canada (TSX:AC.B) said on Sunday.
“The new agreement recognizes the contributions and professionalism of Air Canada's pilot group, while providing a framework for the future growth of the airline,” Air Canada said.
The ALPA, which represents more than 5,400 Air Canada pilots, said the four-year deal provides pay raises, and improve work rules and retirement benefits.
It said, if ratified, the deal will generate approximately C$1.9 billion in value for its pilots over the four years. This reportedly represents a 46% increase over their previous contract which expired in September 2023.
“After several consecutive weeks of intense round-the-clock negotiations, progress was made on several key issues including compensation, retirement, and work rules,” First Officer Charlene Hudy, chair of the Air Canada ALPA master executive council, said in a statement.
“This agreement, if ratified by the pilot group, would officially put an end to our outdated and stale decade-old, 10-year framework.”
Investors welcomed the news, sending Air Canada’s shares 3.9% higher at C$16.46 in early trade on Monday.