Air Canada drops appeal on pensions decision

Air Canada agreed on Tuesday to withdraw its appeal against an arbitrator's ruling on pensions for new hires at the airline after the union representing its check-in and call-center staff threatened job action.

Air Canada said in an e-mailed statement that it was withdrawing the application following a conversation between its chief executive Calin Rovinescu and Ken Lewenza, the national president of the Canadian Auto Workers (CAW) union.

While there may be valid legal arguments in a judicial review of the Burkett decision, it is more important that our employees, unions and other stakeholders have clarity with respect to the direction of pension reform at Air Canada, the airline said.

This is essential to create a climate of stability so that the company can move forward.

Lewenza told Reuters he was very satisfied and gratified by Air Canada's decision.

A spokeswoman for the CAW unit that represents about 4,000 staff at Canada's largest airline, said earlier on Tuesday that the union may work to rule in protest of the Air Canada review, and did not rule out a strike.

In September, an arbitration panel headed by Kevin Burkett selected the union's proposal for a hybrid defined-benefit and defined-contribution pension for new hires. Air Canada appealed that decision last Monday.

The union has characterized the appeal as a violation of the collective agreement.

Air Canada has endured at least one strike this year and been on the verge of two more as it negotiates new contract agreements with all its unions.