Air Transat flight attendants OK $9M in concessions; will reduce staff on A330s

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MONTREAL - Air Transat's more than 1,700 flight attendants have agreed to some $9 million in concessions to help the tour operator meet increasing competition in the holiday travel industry.

Union officials say the flight attendants have voted 66 per cent in favour of the cost cuts, part of a move by the company to trim $20 million in annual operating costs in order to restore profitability.

A key element will see the number of attendants on A330 airliners reduced to 10 from 11. The savings will help Air Transat to develop a narrow-body fleet of Boeing 737s, which the union says should allow the company to retain more jobs in the long run.

Executives of parent company Transat AT (TSX:TRZ.B) have told employees that the airline needs to realize the savings in order to replace airliners flown under subcontract by Nova Scotia-based Canjet since 2009. The Canjet contract ends in April 2014.

"Air Transat's position in the industry has been somewhat precarious for some time," said Peter Buzzell, president of the Air Transat component of the Canadian Union of Public Employees.

"For the union members, this means making hard choices," said Buzzell, who noted that the 77 per cent turnout for the vote was particularly high.

"We have accepted a sacrifice that gives the company an opportunity to grow and maintain jobs in the long term."

For example, operating the 737 aircraft internally could lead to the recall of some of the 50 pilots and hundreds of flight attendants who were laid off after Air Transat decided to reduce its capacity, the company has said.

Employees had earlier accepted a two-year wage freeze and Buzzell noted earlier this year that the union had proved its goodwill last summer by accepting a three-year extension in cost-of-living salary increases.

Carol Lavoie, president of the pilots union, has also said previously that he didn't view the latest company demands as "excessive."

Pilots were prepared, for example, to stay in hotels near airports instead of downtown, which would allow the airline to realize considerable savings, Lavoie has said.

The approximately 1,750 Air Transat flight attendants are divided into three local unions corresponding to their three bases: CUPE 4041 (Montreal-YUL), CUPE 4047 (Toronto-YYZ) and CUPE 4078 (Vancouver-YVR). The Air Transat Component oversees these three local unions.

CUPE is Canada's largest airline union. In addition to the Air Transat employees, it also represents nearly 10,000 flight attendants at Air Canada, Sunwing, CanJet, Calm Air, Canadian North, First Air and Cathay Pacific, as well as ground agents at Porter Airlines in Ottawa.

Note to readers: This is a corrected story. An earlier version stated that the Canjet contract ends this April.