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Air Canada Reaches Tentative Deal With 11,000 Workers, Avoids Strike
The tentative IAMAW deal covers 11,000 workers. Ratification vote and board approval next. The agreement removes strike risk. Wage cost details are key for the stock.
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Air Canada on Saturday reached a tentative collective agreement with the International Association of Machinists and Aerospace Workers, covering more than 11,000 employees. The deal requires ratification by union members and approval by the company's board before it takes effect.
The agreement removes the immediate risk of a strike at Canada's largest airline during the peak summer travel period. A work stoppage would have disrupted flight schedules, affected revenue, and damaged customer relationships. The union represents mechanics, baggage handlers, cargo agents, and other ground crew. Negotiations had run for months, with the strike threat hanging over the stock.
Shares of Air Canada closed Friday at C$17.12, down 15% from an April high of C$20.20. Part of that decline reflected labor uncertainty. The tentative deal resolves that overhang. Financial terms were not disclosed. The pilots' union ratified a new contract in late 2023, setting a precedent for wage expectations. For the machinists, similar increases would add to the airline's labor costs.