In a last-ditch effort to rescue Canadian Airlines International, the Government has stepped in to force the Canadian Autoworkers Union (CAW) to ballot members over important wage cuts.
The decree came hours before a 4 December midnight deadline for all 16,400 Canadian employees to accept a sliding-scale wage cut of 4-10%. The CAW, which represents around 3,500 passenger and ticket agents, is the only one of six unions which will not accept the cuts.
The Government stepped in after nervous creditors became increasingly concerned about the future of the loss-making airline. Canadian announced on 2 December that it was suspending C$170 million ($126 million) of payments which are due to lenders and aircraft lessors over the next six months.
The airline has already won concessions of C$152 million in tax breaks over four years from Federal and state governments, while shareholding partner American Airlines also agreed to cut the fees it charges by C$192 million over four years. Both sets of concessions are dependent upon wage agreements from all six unions, however.
CAW union leader Buzz Hargrove has remained defiant, refusing to allow his members to vote on the issue and claiming that C$300 million in wage cuts have already been delivered since 1992.
He is instead demanding state financial support and industry re-regulation.
Source: Flight International