Airline analyst says he'd be 'genuinely surprised' if Air Canada, pilots reach agreement on Saturday

well we're returning to our top story This Hour Air Canada and the pilots Union have less than 12 hours until midnight tonight to strike a contract deal and avoid a potential shutdown the airline has released a statement just this hour that reads in part Although our preparations for a possible suspension of operations continue we have not yet canceled any flights we are finalizing our plans delaying the first cancellations as much as we can as we know that once the wind down has started we cannot avoid disruptions for several days even if a settlement occurs quickly for more on this we've reached Carl Moore in Montreal he's an associate professor in the faculty of management at McGill University and an airline industry analyst Mo has also previously worked as a consultant for many companies including Air Canada we really appreciate your time today my pleasure Linda okay so what everyone wants to know less than 12 hours to this strike deadline is what's going to happen now what do you think how do you think How likely do you think it is that these two parties will reach an agreement within the next 12 hours or so I suspect probably not I think it's something we're going to see a strike happening uh air Canon is going to start winding down some flights tomorrow because they go long distances and they don't want Crews and passengers and planes to be stuck halfway around the world so they're starting to wind down uh starting tomorrow but it'll really get serious uh Tuesday and Wednesday and Wednesday would be the strike day I suspect my two cents worth it's going to go forward at this point uh they might be some miracle and reach agreement later today but I would be genuinely surprised by that not what many people who have travel plans want to hear I'm sure but let's break down the issues that are at play here the airline pilots Association the union calling for a wage increase they have blamed what they call quote corporate Greed for holding up these talks what do you make of that well something where when you look at the settlements that the pilots in the US have got uh United was 40% uh over 3 to four year period dealt to 34% very impressive wage increases down there compared to relatively smaller ones here in Canada now there is some reason for that that those settlements re reached a while ago and the world's change has gone down on a bit but it's a fair point that they need to have and deserve to have a considerable increase particularly compared to the um agreement they've had for the last 10 years which was a couple percents points a year on the other hand Air Canada is an airline it's a business it needs to make profit in order to buy new planes in order to be able to keep refur refurbishing things and moving forward so both are kind of at a point where air can the demands need come down here canidates offer needs come up and I think they'll get to that it may possibly require government government intervention or a strike of you know probably in the area of seven 10 days but um I think it's going to take that kind of dramatic action for the two sides to give into each other I want to pick up on what you just said there about government uh intervention here we know the Prime Minister yesterday was asked about this he said you know every time there's a strike you think that the the government is going to jump in and fix it we're not going to do that he said do you think that's the right decision I I think it is and when you look at it the cncp strike was not that long ago the government stepped in WestJet mechanics were on strike a while ago again there was arbitration arbitration the thing is that it's a political question as well so as an election next year uh the NDP stepped away for their cooperation with the Liberals and the NDP it's in their DNA to be absolutely on the side of the Union so it's something where and po has said as a conservative parties not going to ask for government Intervention which they'd be more apt to and stepen Harper did many years ago so it's something where it's a political question and part of it is how long does the straight go on how bad does it get and at a certain point more and more people call on the government to intervene but I suspect that would be after seven or 10 days where it's starting to really hurt the economy and affect a lot of Canadians yeah how do you know when we've sort of reached that point because as you say you know this has major economic implications and potentially people stranded all over the world uh who are looking to get back and people who can't get to where they need to be there's also the reputational damage of all of this so with everything that uh will come to play if this strike does go ahead what do you think it would take for the prime minister to change his mind on this and step in with that binding arbitration lots of complaints from a lot of people so that he has broad support and it would be seen as a popular move among many Canadians I think is what it would be so it would help the chance of liberals get reelected next year I think that would be the central concern of the liberal party and the Prime Minister and and reasonably so and you talked about that middle ground um you know that the uh Air Canada has called the uh demands unreasonable uh the union has said that the uh company is weaponizing the Canadian economy when so much uh there's the the language that's being used there's so much vitriol in that and it seems that that it very very far apart at this point what does that middle ground then look like and how do you kind of get there well then I think it'd be matter that Air Canada pays more but less than your union wants and they kind of both slightly unhappy but that's probably when you have a reasonably good negotiation almost like selling a house or something like that where both sides have to give a bit and what we hear is kind of it just um it's strong language from both sides it's a negotiating position in public for the public for the government but when they get to the bargaining table they tend to be more reasonable because they understand that and they've been there before they've got toh come to a agreement both can live with may not be excited about may not be really happy with but can live with and can take to their respective uh publics and the respective organizations and defend it before them this is a I think a negotiating game being played out in the media to some degree we see that happen reasonably often when it comes to Air Canada and Pilots is much more of a public a public spectacle well we'll be watching it closely and I have a feeling as you say that this uh spectacle is going to continue as we go over at least over the next 12 hours and wait for that deal uh Airline industry analyst Carl Moore thanks very much for helping us make sense of all of this and I'm sure we'll be talking Linda the next few days again hope you have a good weekend you as well