People walk by Air Transat signage at the Montreal Airport in Montreal from the Vatican on Monday.Andrej Ivanov/The Globe and Mail
A tentative agreement reached hours before a strike deadline averted a work stoppage by Air Transat’s TRZ-T 750 pilots on Tuesday night.
The Montreal-based leisure carrier and the Air Line Pilots’ Association have been in talks for almost a year, seeking to replace an agreement reached in 2015. Talks held in Montreal were taking place almost around the clock.
Details of the deal, which must be approved by a majority of union members at an upcoming vote, were not immediately available. The union said the agreement is a “modern contract” that “recognizes the professional contributions of Air Transat pilots.”
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The tentative agreement will come as welcome news to Air Transat’s customers heading into the busy holiday travel season.
The airline began suspending flights on Tuesday and planned to shut down by Wednesday in order to limit the number of stranded passengers, crews and aircraft.
In a statement, Transat chief executive officer Annick Guérard apologized to customers whose travel plans were cancelled or disrupted by the threat of the shutdown.
“We would have greatly preferred to avoid the threat of a strike, which forced us to modify our operation,” she said. “Our priority now is to quickly restore our operations and deliver on our commitment to provide service that meets our standards.”
The union had issued a strike notice for 3 a.m. ET on Wednesday morning.
Pilots were seeking better pay and working conditions, trying to keep up with their counterparts at Air Canada and other airlines. Air Canada’s pilots last year approved a four-year deal that came with a 42-per-cent pay hike.
“Our pilots have been frustrated flying under a decade-old, outdated collective agreement,” Bradley Small, a union leader and Air Transat pilot, said in a statement. “This was compounded by months of stall tactics by Air Transat management during our nearly year-long negotiation.”
The agreement provides a measure of relief for Transat, which is facing mounting financial losses, a large bailout debt to the government and a tussle for control of the boardroom led by unhappy investor Pierre Karl Peladeau, chief executive officer of Quebecor Inc.
Mr. Peladeau wants to renegotiate the agreement Transat reached with Ottawa that reduced its pandemic bailout debt to $334-million from $772-million but gave the government a 20-per-cent stake in the company.
Air Transat lost $114-million in 2024, and has not posted a profit since 2018, when it made $10-million. Its share price has fallen by 57 per cent over the past five years on the Toronto Stock Exchange.
Geraint Harvey, a professor at Western University who studies airline labour, said the airline’s financial straits were known to negotiators on both sides, and likely helped push them toward a deal.
“There was huge pressure on the airline to find an agreement,” Prof. Harvey said. At the same time, the pilots’ union knew it was not sitting across the table from a cash-flush employer, he said.
Air Transat, a second-tier carrier, cannot afford an agreement that provides the same pay as Air Canada’s pilots receive, said John Gradek, who teaches aviation leadership at McGill University.
Under the previous agreement, Transat pilots in the middle of the seniority list made about $200,000 a year, compared with $300,000 at Air Canada, Mr. Gradek said.
Transat, which also sells tour packages, employs about 5,000 people and flies 43 planes to resort destinations in Europe, Mexico and the Caribbean.
Air Transat was scheduled to fly 47 flights on Wednesday. It was not immediately clear if the gradual shutdown would prevent the airline from fulfilling its plans.