A big failure for Air Canada’s weak management. Are its days numbered?

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Steven Tufts is an associate professor in the faculty of environmental and urban change at York University.

Flight attendants represented by the Canadian Union of Public Employees reached a tentative agreement with Air Canada AC-T early Tuesday. The full details have not been released but it appears that this will be a once-in-a-generation agreement that will transform compensation in the industry. The union has won “ground pay” to cover unpaid time at work, reforming a system that mostly paid flight attendants only for time in the air.

Flight attendants demonstrated what can happen when workers say enough is enough to employers lobbying for government intervention in the free collective bargaining process. We can’t overemphasize the power of labour militancy in this historic strike, but we also have to hold Air Canada accountable for their lack of strategy and gross mismanagement of the entire situation.

Does current Air Canada senior management, that made so many missteps in recent rounds of bargaining, have what it takes to now rebuild multiple relationships? The company’s board of directors will review what has happened over the past year with labour relations and decide whether a new leadership team is needed. Chief executive officer Michael Rousseau may need to dust off his résumé.

We can start with the context of the strike that Air Canada created. Signing a 10-year agreement with CUPE in 2015 may have seemed a good idea at the time as the company secured a decade of labour peace. But a decade is a ridiculous length for any collective agreement as industry conditions change. Over the life of the agreement CUPE members’ real wages declined, as a result of high levels of inflation. Tensions over unpaid time also came to a head as flight delays were common after pandemic restrictions were lifted, increasing the amount of unpaid time on the ground.

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Despite an unprecedented 99.7-per-cent strike mandate vote by flight attendants, management did not appear to understand the degree of discontent. If a deal couldn’t get done, Air Canada would simply call upon Jobs Minister Patty Hajdu and Prime Minister Mark Carney to intervene and get flight attendants quickly back flying. When CUPE issued its 72-hour strike notice, Air Canada issued its own lockout notice, presumably to make it more palatable for the government to end a lockout rather than curtailing workers’ rights.

The company did the same thing last year with the pilots, but it was during an election cycle and the government signalled it would not pre-emptively restrict pilots from striking. The pilots signed a significant deal without a work stoppage. This time the same strategy of calling mommy and daddy in Ottawa was also used, but the move didn’t go as planned. And when flight attendants defied the back-to-work order there was apparently no other strategy for the airline.

Air Canada CEO Michael Rousseau admitted as much in a disastrous interview with BNN Bloomberg when he stated: “We thought that Section 107 would be enforced” and that the union “didn’t tell us” they would defy the order. It was clear well before this revelation that Air Canada was not prepared for a strike.

First, despite far superior resources, there was no effective effort by the company to counter the union’s unpaid labour campaign. Messaging that “this is how it is in the industry” and “the pay is included in the rate” was a lacklustre effort at best. Second, there was no attempt to gradually wind down the number of flights during negotiations to limit the number of cancelled flights or secure seats from other airlines to service stranded passengers. Lastly, there was no plan to ramp up flights after the strike as it will take more than a week to resume regular service.

The government is also at fault here. In recent years, they have been enablers of federally regulated employers’ addiction to back-to-work directives. The government is your friend until it isn’t, and Ms. Hajdu and Mr. Carney can’t be happy with Air Canada. The political capital Liberals have built with unions has leaked to both the Conservatives and the NDP. Air Canada is a private company in a federally regulated sector and strained government relations is a costly disadvantage.

Aside from any necessary repair to government relations, Air Canada needs a plan to mend its relationship with flight attendants and passengers. The company depends upon flight attendants, the front line of service, to manage customer relations. As one CUPE member quipped online, “as flight attendants, we are used to apologizing for Air Canada.”

CUPE and the broader labour movement will rightly take this as a win for workers. The government may now think twice about using S107 – the back-to-work legislation. Employers will also adapt their tactics to an environment with more labour militancy. Unions will need to be ready for new strategic developments as employers will learn from Air Canada’s mistakes and come to the table much better prepared.