Air Canada pilots have decried an “embarrassing” wage gap with the United States after the Delta deal

MONTREAL (Reuters) – Pilots for Air Canada (AC.TO) are pushing for higher wages in the run-up to new contract talks, following recent gains by pilots at US carrier Delta Air Lines (DAL.N), Etihad. Reuters representatives said.

The contract between Delta and its pilots that went into effect Thursday provides a pay increase of 34% over four years, putting pressure on other US airlines to strike similar deals.

It also marshals the pilots of Canada’s largest airline. The Air Canada Pilots Association (ACPA) said via email that Delta’s latest hourly rates are 45% higher than Air Canada’s current hourly rates.

Air Canada pilots have received a pay increase of 2% annually, since 2014, according to the ACPA, which represents about 4,500 pilots. The union said they would likely start salary talks as early as this year or in 2024.

“Aviators in the United States have recently secured significant pay increases and other contract improvements, creating an embarrassing gap with Canada,” ACPA senior union leader Charlene Headey said in a statement.

The talks come as North American airlines mass-recruit thousands of pilots to meet a rebound in travel demand after a pandemic-induced slump. Air Canada did not respond to a request for comment.

ACPA is in talks to possibly join the Airline Pilots Association (ALPA), the world’s largest pilots’ union, representing more than 60,000 pilots.

Many US airlines recognize the importance of crew in their business model “by offering pilots improved wages and working conditions, in most cases far exceeding their Canadian counterparts,” said Canadian ALPA President Tim Perry.

The pilots north of the border are now trying to gain ground. Union University said Canadian Sunwing Airlines pilots received a 23% pay increase early this year and another 2.5% increase next January as part of their existing four-year deal.

Some airline executives worry that huge pay increases for pilots will inflate fixed costs and make it harder to repair debt-laden balance sheets. Delta expected its earnings to take a hit in the first quarter as the trial deal is expected to drive up operating costs.

Air Canada, which expects to return to its 2019 capacity levels next year, is facing cost pressures.

Salary is also a priority for pilots in negotiations at Canada’s second largest airline, WestJet.

American Airlines Group (AAL.O) and United Airlines (UAL.O) also negotiate with their pilots.

(Reporting by Alison Lampert in Montreal. Additional reporting by Rajesh Kumar Singh in Chicago; Editing by Matthew Lewis and Susan Fenton

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