TORONTO – ACE Aviation Holdings should demonstrate it can satisfy Air Canada’s employees’ and retirees’ entire pension obligations for the next ten years before it makes any discretionary cash distributions to its shareholders, say union leaders Dave Ritchie and Pamela Sachs.
“Any distribution to shareholders at this time and in the absence of any assurance that Air Canada’s future obligations to its employees and pensioners can be fully met is oppressive, premature and imprudent,” Sachs and Ritchie wrote in a letter to ACE Directors today.
Ritchie is General Vice-President of the International Association of Machinists (IAM) that represents Air Canada’s, cargo agents, mechanics, baggage handlers, ground handlers, clerical and finance workers. Sachs is President of the Air Canada Component of CUPE that represents Air Canada’s 7,000 flight attendants. The Union heads are outraged that ACE will ask its shareholders at the November 10 Annual Meeting to approve a $600 million special cash distribution to shareholders.
“During CCAA restructuring, Air Canada secured extraordinary wage, benefit, working conditions and pension funding concessions from our members and pensioners,” says Ritchie, whose members made $1.3 billion in concessions over six years.
Air Canada got concessions from its unions based on the Company’s own financial projections that indicated that their sacrifices were absolutely necessary for Air Canada’s survival. Less than a year later and with $2.5 billion cash on hand, ACE has significantly outperformed its projections.
“Air Canada’s unions have wage re-openers in July 2006. The company said that if it outperforms expectations, the wage re-opener provisions in our collective agreements would allow our members to recoup our losses,” says Sachs, whose members made $6.6 billion in concessions over six years.
Ritchie and Sachs have advised ACE’s Directors that they plan to seek full restoration of the entire value of all wage and benefit concessions, and will take the issue to final arbitration if necessary. CUPE and IAM have also requested ACE’s ten-year financial projections to assure them that Air Canada can meet its pension and employee obligations.
The International Association of Machinists, which represents 11,500 employees at Air Canada, is the largest air transport union in Canada. The IAM is represents 730,000 members across North America.
The Air Canada Component of CUPE represents the 7,000 flight attendants who work for Air Canada. CUPE is Canada's largest union, representing half a million workers in the public and private sectors. CUPE flight attendants are safety professionals who play a key role in ensuring the safety and comfort of 100,000 passengers daily across Canada and around the world.
