Air Canada pilots bow to cost-cutting deal MONTREAL (Reuters) =97 Air Canada's 3,400 pilots agreed Sunday to a=20 cost-cutting deal crucial to the insolvent airline's survival, only hours=20 before a judge was to impose a settlement that could have grounded the=20 country's largest airline.Air Canada said the pilots agreement allows the=20 company to reach its overall labor cost reduction target and continue to=20 restructure under creditor protection. "It's business as usual for Air=20 Canada and customers may book with confidence," the airline said in a press= =20 release. The airline is now expected to start negotiating with creditors to= =20 significantly reduce its C$13 billion ($9.5 billion) in debts and aircraft= =20 lease obligations. Financial details of the agreement were not disclosed,=20 but the union had previously said Air Canada demanded about C$250 million=20 ($182 million) in cuts, including more than 800 layoffs. "No one is happy with a situation where salaries will be cut, and jobs=20 lost. However, our pilots realize the gravity of the situation and are=20 willing to do what it takes to help build a new future for Air Canada," Air= =20 Canada Pilot Association president Don Johnson said in a press release.=20 Getting labor concessions was key for Air Canada, the world's No 11=20 carrier, which is losing C$5 million ($3.6 million) a day because of the=20 slump in travel brought on by the economic downturn, the Sept. 11 attacks=20 on the United States, the war in Iraq and, most recently, the SARS epidemic= =20 that is scaring passengers away from its main Toronto hub. Air Canada has=20 said it needs to cut C$770 million ($560 million) from its annual labor=20 costs of C$3 billion ($2.2 billion) and lay off 10,000 of its 40,000=20 employees to stay aloft and emerge from the bankruptcy protection granted=20 April 1. SHUTDOWN AVERTED The pilots were the only union still without an agreement with Air Canada,= =20 as the other eight unions all agreed to job and cost cuts over the last=20 week representing some C$600 million ($483 million) in savings. The key=20 hurdle with the pilots was an Air Canada proposal to shift smaller planes=20 toward its regional carrier Jazz where the pilots, represented by a=20 different union, receive lower pay than their colleagues at the main=20 carrier. If Air Canada had failed to win concessions from its pilots, it=20 had to appear in court at 8 a.m. on Sunday where a judge could have forced= =20 the airline into liquidation. Such a decision would have grounded the=20 airline, stranding tens of thousands of passengers and disrupting more than= =20 1,300 average daily flights. Unions will hold a ratification vote on their respective cost-cutting=20 agreements in the coming week, while Air Canada expects to finalize all the= =20 deals by the end of June. Air Canada stock closed at C$1.67 on the Toronto= =20 Stock Exchange last Friday, after tumbling as low as 69 Canadian cents soon= =20 after the company obtained protection from its creditors. Many analysts=20 have stopped their coverage of the company as they expect a debt-for-stock= =20 swap sought by Air Canada to wipe out the value of the stock. Air Canada=20 will be seeking to convert up to C$9 million ($6.5 million) of debt and=20 claims into stock, according to documents submitted by the company to its=20 unions. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.natalielaughlin.com/ TnT Webdirectory: http://search.co.tt *********************************************************