By Allison Lampert
MONTREAL (Reuters) -Air Canada pilots are pressing for higher pay in the run-up to fresh contract talks, following recent gains secured by pilots at U.S. carrier Delta Air Lines (NYSE:DAL), union representatives told Reuters.
A contract between Delta and its pilots that came into effect on Thursday delivers a 34% pay increase over four years, driving pressure on other U.S. carriers to reach similar deals.
It is also galvanizing pilots at Canada's largest carrier. Delta's latest hourly pay rates are up to 45% higher than current Air Canada hourly pay rates, the Air Canada Pilots Association (ACPA) said by email.
Air Canada pilots have received a 2% wage increase per year, since 2014, said ACPA, which represents about 4,500 pilots. They could potentially begin salary talks as early as this year, or in 2024, the union said.
"Pilots in the U.S. have recently secured significant wage increases and other contractual improvements, creating an embarrassing gap with Canada," Charlene Hudy, a top ACPA union leader, said in a statement.
The talks come as North American carriers are collectively recruiting thousands of pilots to meet a rebound in travel demand following a pandemic-induced slump. Air Canada did not respond to a request for comment.
ACPA is in talks to possibly join the Air Line Pilots Association (ALPA), the world's largest pilots' union, representing more than 60,000 pilots.
ALPA Canada President Tim Perry said many U.S. carriers recognize the importance of crew to their business model "by providing improved wages and working conditions for their pilots, in most cases far surpassing those of their Canadian counterparts."
Pilots north of the border are now trying to make gains. Canada's Sunwing Airlines pilots secured a 23% wage hike early this year and another 2.5% raise next January as part of their existing four-year agreement, union Unifor said.
Some airline executives are concerned that hefty pilot pay raises will inflate fixed costs and make it tougher to repair debt-laden balance sheets. Delta has forecast a hit on its earnings in the first quarter as the pilot deal is estimated to drive up operating costs.
Air Canada, which expects to return to 2019 levels of capacity next year, is also facing cost pressures.
Salary is also a priority for pilots in negotiations at Canada's second-largest carrier, WestJet.
U.S. carriers American Airlines (NASDAQ:AAL) Group and United Airlines are also negotiating with their pilots.