Air Canada Union to Re-vote on Contract

TORONTO — Air Canada (ACa.TO) said on Monday that some 12,000 union workers will re-vote on a new contract after the union and the Canadian carrier amended the terms of an agreement over the weekend.

The original agreement, which provided for a tentative pension funding moratorium as well as labor stability agreements, was narrowly rejected by members of the International Association of Machinists and Aerospace Workers last week.

Mechanics fear aircraft maintenance and repair work will be transferred to El Salvador's Aveos Fleet Performance Inc., a sister company previously called Air Canada Technical Services that was spun off in 2007.

Air Canada parent ACE Aviation (ACEa.TO) owns a 27.8 percent stake in privately held Aveos, which has 1,400 staff in El Salvador and 3,300 in Canada.

Two unions that represent customer service staff and dispatchers have already ratified 21-month agreements, while the unions representing flight attendants and pilots are expected to vote next week.

The agreements are subject to a number of conditions including ratification by the unions, the Canadian government's approval of the company's amended pension funding rules and Air Canada raising a minimum C$600 million ($515 million) in new financing.