Business groups urge government to prevent Air Canada pilots strike
Adds background in paragraph 7, comment from labor minister in paragraphs 8-9, reaction from Air Canada in paragraphs 10-12, comment from pilots' union in paragraph 13
By David Ljunggren and Rajesh Kumar Singh
OTTAWA, Sept 11 (Reuters) -Around 100 business groups on Wednesday urged Canada's government to prevent a strike by Air Canada AC.TO pilots, saying a stoppage would disrupt supply chains and spoil the country's reputation as a reliable trading partner.
Canada's largest airline said on Monday it was finalizing plans to suspend most of its operations soon as talks with the pilots' union were nearing an impasse over wages.
A strike could start as soon as Sept. 18. Air Canada and its low-cost subsidiary Air Canada Rouge together operate nearly 670 flights per day and a shutdown could affect 110,000 passengers daily as well as freight carriage.
In a letter to Labour Minister Steven MacKinnon, the business groups noted he had stepped in quickly last month to halt a stoppage at the country's two main rail companies, forcing employees back to work and imposing binding arbitration.
"The federal government needs to take decisive action. The impacts of a labor disruption at Air Canada will ripple throughout the economy," they said.
"Should the parties not come to a negotiated agreement, the federal government must... be prepared to act in advance to prevent yet another damaging disruption by referring the matter to binding arbitration where a neutral arbitrator can resolve any outstanding issues."
After the rail strike was halted, a government source said Ottawa would not be trigger happy when it came to using its power to end disputes.
MacKinnon told reporters on Wednesday that while significant issues remained, he felt the talks had momentum.
"There's no reason for these parties not to be able to achieve a collective agreement. I'm asking them to knuckle down and get the deal done," he said.
Air Canada's 5,400 pilots are demanding wage rates in their new contract that would narrow the pay gap with their counterparts at major U.S. carriers like United Airlines UAL.O.
The airline said while it was still actively negotiating, it was hard to predict if a deal would be reached.
"We have to remain competitive in our market, which is Canada," an Air Canada spokesperson said. "There are no labor agreements where the benchmark is another country - the U.S. or any other."
The Air Line Pilots Association (ALPA), which represents the Air Canada pilots as well as those at most U.S. airlines, said the Canadian economy was being "weaponized" to stop free collective bargaining. It warned that government interference would tip the scales in favor of companies.
The business groups said if Canadian firms were unable to deliver their goods to market on time, their international partners would begin to seek permanent alternatives.
A strike "will reinforce a growing perception that Canada is not a reliable trading partner," they added.
Reporting by David Ljunggren and Rajesh Kumar Singh; Editing by Bill Berkrot and Jamie Freed
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