Air Canada Near Deal With Flight Attendants

Flight attendants at Air Canada are hopeful of reaching an agreement with the airline, a union spokeswoman said, clearing another obstacle for the cash-strapped carrier to secure much-needed financing.

"As far as we are concerned the process is almost complete," said Katherine Thompson, president of the Air Canada component of the Canadian Union of Public Employees, or CUPE.

"It is very difficult for me to say what the company will do," she said.

CUPE, which represents 6,800 flight attendants at Air Canada, is one of two unions that is still in talks with the carrier on the thorny issue of a 21-month moratorium on funding a pension shortfall and new union agreements.

The other is the union representing the carrier's pilots. Its spokesman, Paul Howard, declined to comment.

Air Canada reached tentative deals with three of its unions last week.

Reaching settlements with its unionized workers will help the debt-laden airline defer funding its CAD$2.9 billion (USD$2.6 billion) pension deficit while union agreements would be a prerequisite for lenders.

Genuity Capital Markets analyst David Tyerman has estimated that an agreement with all its unions on a pension moratorium will reduce cash outflows by about CAD$575 million over the 21-month period.

CUPE's Thompson said if a deal is struck it would be similar to that reached between the airline and its other unions a week ago, although the flight attendants had "achieved further gains".

Like the other agreements, it would also include an equity stake in Air Canada for flight attendants.

She said the path to a possible agreement had been helped by the involvement of a government-appointed mediator and the visit over the weekend of Canadian Finance Minister Jim Flaherty to the talks' venue.