Air Canada, Montreal, said the arbitrator in its dispute with the International Association of Machinists and Aerospace Workers union chose the company’s final offer that maintains a defined benefit plan for current employees.
The five-year agreement introduces a multiemployer pension plan for employees hired after June 18, Canada’s largest airline said in a statement. It also reduces the pension plan’s deficit and “establishes a protocol for the sustainability of the pension plan.”
Air Canada has 10 DB plans with a combined C$10.9 billion (US$10.6 billion) in assets.
The offer selected by arbitrator Michel Picher follows months of labor unrest at Air Canada. Canadian Labor Minister Lisa Raitt blocked a planned lockout of pilots in March, after more than a year of unsuccessful contract talks, by referring it to Mr. Picher. Simultaneously, a strike by the Machinists union, which had accused the carrier of doing too little to bolster its pension program, was blocked by the government.
Peter Fitzpatrick, a spokesman for Air Canada, and Bill Trbovich, a spokesman for the Machinists union, didn’t return voice mails requesting comment.