Air Canada, sales agents to continue labor talks

Tue Feb 22, 2011 2:57pm EST

* Contract expires on Feb. 28

* One of five labor contracts expiring by March 31

* Union expects "significant increases" for sacrifices

VANCOUVER, Feb 22 (Reuters) - Air Canada ACa.TO ACb.TO and its unionized customer service and sales agents are prepared to continue contract negotiations beyond next Monday's expiry of the current agreement, the union said on Tuesday.

Air Canada and the Canadian Auto Workers union (CAW), which represents 3,800 agents across the country, opened talks on a new labor contract last week. They are scheduled to hold meetings in Toronto for the next two weeks, CAW spokesman Darryl Bink said.

The agents' contract is the first of five Air Canada labor agreements, including those of pilots, mechanics and flight attendants, that expire by April 1. The market is closely watching negotiations as any strikes could derail a fragile recovery at the country's biggest airline.

Industry analysts expect that unions, emboldened by Air Canada's stronger financial position, will push aggressively for better wages and benefits after they accepted status quo contracts 21 months ago to keep the company out of bankruptcy protection.

The CAW said recently its top negotiating issues are wage increases, pensions, vacation, sick time, shift schedules and benefit improvements.

"It is the sacrifices that our members have made over the past decade that have enabled Air Canada to get back to profitability," said Paul Janssen, chairman of the CAW bargaining committee that represents the sales agents.

"Our members expect to see significant increases for those sacrifices," Janssen said in a newsletter this week.

An Air Canada spokeswoman said the airline believed it had "a good foundation in place for the parties to find common ground and achieve negotiated settlements."

Air Canada's shares were sharply lower on Tuesday, knocked lower along with other airline stocks because of surging oil prices, a key cost for the industry. The shares were down 18 Canadian cents, or 5.5 percent, at C$3.09.

($1=$0.99 Canadian) (Reporting by Nicole Mordant; editing by Rob Wilson)

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