Air Canada pilots decry ’embarrassing’ pay gap with US after Delta deal

MONTREAL, March 3 (Reuters) – Air Canada ( AC.TO ) pilots are pushing for higher pay ahead of new contract talks, following recent gains secured by pilots at U.S. carrier Delta Air Lines ( DAL.N ), the union says representatives to Reuters.

A contract between Delta and its pilots that went into effect Thursday offers a 34% pay increase over four years, fueling pressure on other U.S. airlines to reach similar deals.

It also galvanizes pilots at Canada’s largest carrier. Delta’s latest hourly wage rates are up to 45% higher than current Air Canada hourly wage rates, the Air Canada Pilots Association (ACPA) said by email.

Air Canada pilots have received a pay increase of 2% per year, since 2014, said the ACPA, which represents about 4,500 pilots. They could potentially begin wage talks as early as this year, or in 2024, the union said.

“Pilots in the United States have recently secured significant pay increases and other contractual improvements, creating an embarrassing gap with Canada,” Charlene Hudy, a top ACPA union leader, said in a statement.

The talks come as North American airlines collectively recruit thousands of pilots to meet a drop in travel demand following a pandemic-induced slowdown. Air Canada did not respond to a request for comment.

ACPA is in talks to possibly become a member of the Air Line Pilots Association (ALPA), the world’s largest pilot union, representing more than 60,000 pilots.

ALPA Canada president Tim Perry said many US airlines recognize the importance of crew to their business model “by providing improved wages and working conditions for their pilots, which in most cases far surpass those of their Canadian counterparts.”

Pilots north of the border are now trying to make money. Canada’s Sunwing Airlines pilots secured a 23% pay rise early this year and another 2.5% increase next January as part of their existing four-year agreement, union Unifor said.

Some airline executives worry that big pilot pay increases will increase fixed costs and make it harder to repair debt-laden balance sheets. Delta has predicted a hit to earnings in the first quarter, as the pilot agreement is estimated to increase operating costs.

Air Canada, which expects to return to 2019 capacity levels next year, is also facing cost pressures.

Pay is also a priority for pilots in negotiations at Canada’s second largest airline, WestJet.

U.S. airlines American Airlines Group ( AAL.O ) and United Airlines ( UAL.O ) are also negotiating with their pilots.

Reporting by Allison Lampert in Montreal. Additional reporting by Rajesh Kumar Singh in Chicago Editing by Matthew Lewis and Susan Fenton

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