Air Canada finalizing contingency plans to suspend most of operations

morning Air Canada says it is finalizing contingency plans to suspend most of its operations as talks with the airlines Pilots Association continue the company says the sides remain far apart ahead of a September 15th deadline air cada says unless an agreement is reached before then either party May issue a 72-hour strike or lockout notice a candidate says in the event of a strike or lockout it would then initiate a 3-day windown plan the airline pilots Association represents more than 5200 Pilots at Air Canada and Air Canada Rouge Air Canada says customers whose flights are canceled would be notified and also would be eligible for a full refund let's talk more about this John grck joins us this morning elector at Mill University's Aviation Management program good to speak to you John so the pile is holding up for the significant wage hike here so put this into context for us are they considered underpaid right now on a global scale or is this just Equity no this is basically underpay I think that the the Air Canada Pilots are coming off a 10-year contract uh that uh was created back in 2014 and uh there's a significant change in the economic conditions around the world and particularly with pilots in the us. who've been getting some pretty interesting wage increases in the last 24 to 36 months uh and the Air Canada Pilots are basically saying no time for us to catch up do you have a sense of how much of a raise that might be looking for like how far behind are they John they're about 40 to 45% behind in terms of equivalent dollars to our to the US pilots flying exactly the same pieces of equipment so there's a significant Gap and I think that uh you know the the pilots have been very very uh you is strong you know strong in terms of making sure a Canada understands that uh the pilots are all behind this push uh and I think that airic Canada really has to you know step up to the plate and really recognize that they've had uh a nice little vacation from Pilot wage increases and I think it's time for can to recognize that there's a need to uh to do something okay John so September 15th less than a week away Air Canada passengers with flights coming up in a couple of weeks are probably pretty nervous right now and confused about what to do uh so what would a strike mean for them I know I've heard of refunds but what are their options oh I think that once they once they start moving into a into a um you know pre-strike planning perspective and you start doing what erican has announced today which is starting to wind down their operations as of Sunday of next this weekend um you know those flights that are cancelled uh passengers will be refunded uh there is no question about you know withholding anything or giving you flight credit for it that is it that is really a a refund process um and know if you're booked on flights Beyond September 15th or Beyond September 17th or 18th you know the the my advice has been all along to basically look at getting yourself a plan B and try to book yourself onto another carrier with a fully refundable ticket so that you know in the event that this strike does get settled you know and there's a 50/50 check chance of that that uh at least you have the refundable ticket from your other carrier that you can refund but uh you know Plan B in this case is very much uh part of the motors opendi for passengers John I'm curious because we talk a lot about a Canada as sort of being the largest national carrier in this country and the financial sort of struggles they've had they're always very up and down as you well know could Air Canada afford a 45% potential you know wage hike to its 5200 or so Pilots that seems like uh you know in terms of like the the future fate of the airline and you know the bottom line ultimately could could the airline handle that yes it can uh there's no doubt about it I think Air Canada has made significant improvements in its financial performance over the last few years um sometime we talk we talk about what this wage increase would mean to Air Canada's bottom line yeah it's going to be about a $500 million hit uh but you know the Market's already discounted that you know the share prices have been wallowing in the18 you know $18 range uh 156 $177 range and I think that you know the the market really understands that airan is going to have to have some significant wage increases for these Pilots uh the question is you know the pilots are want somewhere between 40 and 45% I'm not sure what air can has been offering and and there kind the rumors are going around last week that they were offering 30% but that's an old old offer that made about a year ago nobody's talking at our Canada in terms of what they're looking to offer the pilot so there's still a major Gap to talk about between the pilots in there Canada mhm and John uh we know that the federal government stepped in to stop A disruption to train service uh any chance that they might step in here uh there's always a chance the question would be one how do they do it um you know we've seen the cirb uh step in with the with the rail strike but that was a a national strike that really was where you know you had no alternative but to get the rail moving again in this case you have Airline yes Air Canada is the largest but there's a lot of capacity out there in the marketplace place this is not a Peak Travel period so between WestJet Porter flare there's a lot of capacity out there in the marketplace to handle any any disruption Air Canada might have so there is no National Emergency associated with a an Air Canada strike and I think Air Canada has to recognize that and has to negotiate in in Full Faith with the with the pilots okay we'll see what can happen between now and the 15th of course the clock is clearly ticking John grck really appreciate the analysis this morning thank you for this thank you my pleasure have a great day and you too