Air Canada has offered to boost the pay of more than 5,000 pilots by about 30 per cent within the next three years, according to people familiar with the matter, as it seeks to prevent a strike.

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Pilots at Canada’s largest airline would received a minimum 20 per cent increase up front, followed by annual raises over a three-year period, said the people, asking not to be identified because the discussions are private. Pilots with one to four years of service would receive more, the people said.

The offer means that a captain with 10 years of service flying a wide-body aircraft such as a Boeing 777 with a current salary of just over $350,000 per year may see an increase of more than $100,000 over the life of the contract, the people said. The airline’s offer also includes improvements in pension and health benefits.

Air Canada and the Air Line Pilots Association have been in talks for more than a year. The last contract, a 10-year deal that was ratified in 2014, provided pay increases of about 2 per cent annually. The pilots haven’t received a raise since last year.

Air Canada pilots are paid less than half of what industry counterparts receive, the union has said in previous statements.

ALPA’s local head, Charlene Hudy, declined to comment on the specifics of the proposal. But entry-level wages for pilots are an issue, she said. “One-quarter of our pilots have a second job, with almost 80 per cent of those needing the job out of necessity,” she said. “We are trying to change that.”

A meeting between the parties is expected later this week. As of last week, the talks had “completely stalled,” Hudy added.

In August, the pilots voted 98 per cent to give the union authorization to strike, and they’re in a position to walk off the job in the middle of September if there’s no deal. The airline introduced a rebooking policy for customers with travels between Sept. 15 and Sept. 23.

The union seeks to close the pay gap with large American airlines, which have given their pilots substantial pay increases. Last year, ALPA reached a four-year agreement with United Airlines Holdings Inc., providing pilots a total compensation increase of as much as 40 per cent, including an immediate pay boost of 13.8 per cent to 18.7 per cent.

“When it is in force, we want our pilots to remain the best-paid commercial pilots in Canada by far,” Air Canada spokesperson Peter Fitzpatrick by email. “We are open to any solution to reach a reasonable settlement, including arbitration.”

Canada’s No. 2 airline, Onex Corp.-controlled WestJet Airlines, agreed to a contract in 2023 that included a 24 per cent compensation bump over four years.

— With assistance from Mary Schlangenstein.

Bloomberg.com