Air Transat’s new A321neoLR takes flight.
Following the successes of 2018, the Air Transat pilots began 2019 with increased unity, a stronger network of volunteers, and a number of new committee members ready to advocate on behalf of the 600-plus pilot group.
In early January, prior to public knowledge of any possible sale of the airline, the pilots’ Master Executive Council (MEC) leaders set their priorities for the year: keeping a focus on important safety issues, including safety management systems, scheduling, and implementing the Canadian government’s recently announced updates to pilot flight- and duty-time regulations.
They also took the unique first step of asking management if it would be open to beginning negotiations early in an effort to reach a new contract before its expiration in early 2020. Management indicated it had no interest in opening negotiations at that time.
During subsequent months, informal discussions and proposals were made between the MEC and management—until it became public that Transat A.T., Inc. was in preliminary talks to sell the airline.
The airline, which had been in talks for some time with potential suitors about a deal, then formed a committee to study and evaluate any incoming proposals with the assistance of legal advisers and financial experts.
Soon after, Transat announced a 30-day period of exclusive negotiations with Air Canada. At the conclusion of the 30 days, the airline and Air Canada issued a joint statement announcing they had concluded a definitive binding arrangement agreement that was unanimously approved by the Transat Board of Directors.
By the end of summer, Air Canada’s bid had cleared another major hurdle by receiving shareholder approval. Once finalized, the deal will see Air Canada acquire all shares of Transat for approximately $720 million or $18 per share subject to further regulatory approvals, including input from the commissioner of Competition, an assessment of the effect on competition, consultations with aviation industry stakeholders and with members of government and the public, and an analysis of the economic effects from the proposed transaction.
Consultations began on Nov. 4, 2019. Transport Canada typically has up to 150 days to conduct such an assessment. However, in the interest of thoroughness, Transport Canada and the commissioner of Competition were given an additional 100 days to complete their assessment before submitting it to the minister of Transport, bringing the decision timeline to June 2020.
Behind the scenes, the pilots were also busy preparing for the potential sale. In accordance with Chapter 45 of ALPA’s Administrative Manual, the MEC set up a Merger Committee while also working closely with ALPA staff, including subject-matter experts in the fields of mergers, contract law, and contract negotiations.
“We’ll continue to study the various integration processes and to work closely with all parties involved to ensure that our members aren’t negatively impacted during this process,” stated Capt. Pierre Lessard, the pilots’ MEC chair. “We support the efforts undertaken by the management at each airline, and we congratulate all shareholders on their vote to proceed in a manner that will ensure the completion of a successful Air Canada acquisition.”
With winter approaching and the sale of the airline awaiting government approval, the MEC and Negotiating Committee were able to refocus their attention on the impending contract negotiations. During this time, management approached the MEC about extending the current contract for one year with a salary increase.
The MEC asked management to submit a fully costed proposal but has yet to receive a response. If received, the MEC will work with ALPA’s Representation and Economic & Financial Analysis Departments to determine the merits of any proposal. If the proposal is determined to be in the best interests of the pilots, the MEC will conduct road shows followed by a ratification vote by the pilots.
If the proposal isn’t considered to be in the best interests of the pilot group, the MEC will continue to move forward with formal contract negotiations slated to begin later this month.