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Air Canada gives pilots lockout notice after final offer

March 8, 2012, Ottawa – Air Canada is threatening to lock out its pilots next week in the midst of the spring break holiday for thousands of families in Ontario after making what it described its "final and best" contract offer.

The airline set a deadline of 12:01 a.m. ET on Monday, the same time as a strike deadline set by Air Canada's (TSX:AC.B) largest union, which represents its ground crew and mechanics.

A work stoppage would throw a wrench into the travel plans for thousands of holidaying families, but Air Canada chief operating office Duncan Dee said airline needed to "bring closure to the ongoing climate of labour uncertainty."

"We have been in protracted talks over the past 18 months which have included various attempts at conciliation and mediation," Dee said in statement Thursday.

"We had hoped this offer would reasonably bring this protracted labour dispute to an end. However, as (The Air Canada Pilots Association) has not accepted our final offer by the proscribed deadline, we are left with no option but to exercise our rights under the Canada Labour Code, a decision which we have not taken lightly.''

Air Canada's pilots last went on strike in 1998 in a dispute that lasted roughly two weeks.

Federal Labour Minister Lisa Raitt has been watching both negotiations and has moved swiftly in the past to intervene in threatened work stoppages at the country's largest airline.

The threat of a lockout comes less than a month into what was supposed to be a six-month mediation process between the airline and
the pilots.

An earlier, two-month effort by a representative of the Federal Mediation and Conciliation Service was unable to bring the two sides together.

The airline and its ground crew also face a strike deadline of 12:01 a.m. ET on Mar. 12.

Air Canada's largest union, the International Association of Machinists and Aerospace Workers, has said its 8,600 members will walk off the job if a deal cannot be reached.

At dispute are wages and a sizable pension deficit, which the union says Air Canada has not dealt with, despite the sale of $2 billion in assets.

Air Canada's employees have been trying to win back pay and concessions they gave up to help the airline restructure under bankruptcy protection in 2003 and 2004.

The government's past actions to prevent or limit strikes by Air Canada's customers service agents and flight attendants suggests it won't tolerate any disruptions by the machinists union or the pilots.

In September, the airline reached a deal with its flight attendants after a strike vote that prompted Raitt to warn of back-to-work legislation if a deal couldn't be reached.

A similar threat ended a walkout by the airline's customer service agents after just three days last year.