=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/06/01/i= nternational0406EDT0422.DTL ---------------------------------------------------------------------- Sunday, June 1, 2003 (AP) Air Canada reaches cost-cutting deal BARRY BROWN, Associated Press Writer (06-01) 01:06 PDT TORONTO (AP) -- Air Canada and its main pilots' union reached a cost-cutting deal early Sunday that clears the way for Canada's dominant airline to restructure its business under bankruptcy protection. Details were not revealed. But the carrier said the agreement with the A= ir Canada Pilots Association means the airline now has achieved its overall labor cost reduction target. "It's business as usual for Air Canada and customers may book with confidence," the Montreal airline said in a statement at about 3 a.m. announcing the cost-cutting agreement. After years of poor management, and beleaguered by competition from inexpensively operated regional airlines and the plunge in air travel from fears of terrorism and SARS, Air Canada is facing extinction. Since filing for bankruptcy protection two months ago, Air Canada has lo= st nearly $4 million a day while feverishly trying to secure cost concessions from its nine unions. While eight of those unions had agreed to pay cuts and layoffs to save some of their members' jobs along with the airline, Air Canada's pilots had refused to go along. But after the pilots rejected Air Canada's latest offer last week, Ontar= io Superior Court Justice James Farley gave the two sides an "absolute" deadline of midnight Saturday to work out a deal or face a court-imposed settlement that could see the airline grounded and its planes seized. Trading in Air Canada shares was halted Friday after Farley issued his deadline. A report issued May 29 by the accounting firm Ernst & Young, the court-appointed monitor of the case, said eight of Air Canada's other union and nonunion employees had agreed to a total of $572 million in annual savings for the airline through a combination of job cuts, wage concessions and changes to working conditions. Air Canada lacks the cash to cover all the financial obligations it has amassed since obtaining court protection from creditors on April 1, the Ernst & Young report said. =20 ---------------------------------------------------------------------- Copyright 2003 AP