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Air Canada pilots cancel vote on tentative deal

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The Air Canada Pilots Association has canceled a vote set to begin on Friday on a tentative labor agreement with Air Canada Inc., the country's largest airline, after parts of the proposed deal proved "controversial" among pilots.

The association said its master executive council will meet April 19 to consider alternatives after its negotiating team held a series of membership meetings this week to explain the tentative agreement.

The association, which represents more than 3,000 pilots and had planned to conclude voting on April 27, said it would not provide specific information on the contentious issues in the pact.

National Bank Financial analyst Cameron Doerksen said the deal proposed a 12-percent wage hike over four years and would put new hires in a defined contribution pension plan, versus the current defined benefit plan.

It also proposed the creation of a new low-cost leisure subsidiary, "crewed by lower cost employees", Doerksen wrote in a note on Thursday, adding there was a reasonable likelihood the contract would be rejected.

Air Canada faces five rounds of contract negotiations with its unionized staff, including pilots, sales agents, mechanics, dispatchers and flight attendants.

The Canadian Auto Workers union, which represents 3,800 customer service and sales agents, said last week that the carrier was demanding "significant concessions, including pension cuts" in negotiations.

The federal government recently appointed a conciliator to help those talks along after little progress had been made.

Air Canada's (AC.B-T) shares fell in afternoon trading on Friday afternoon. They have dropped by more than a third this year, partly on worries that labor unrest could disrupt the airline's fragile recovery.

Industry analysts have said they expect the unions will push for better wages and benefits due to Air Canada's stronger financial position. They accepted status quo contracts 21 months ago to keep the carrier out of bankruptcy protection.

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