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Pension Talks Near Impasse


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http://www.canada.com/montreal/story.asp?id=BF5A73C8-9F4F-44E4-99A3-33CF0BCA0A53

Air Canada pension talks with union near impasse, bankruptcy court told

TORONTO (CP) - Lawyers for Air Canada unions and non-union pension beneficiaries warned a bankruptcy court judge Monday that an arrangement with the insolvent airline is in jeopardy.

At issue is Air Canada's insistence that pensions could become part of the overall restructuring claims process. The airline, which sought court protection from creditors on April 1, has a pension deficit of about $1.5 billion. A lawyer for the Air Canada Pilots Association, Richard Jones, said an agreement had been near last week but now is in doubt.

Counsel for the Canada Auto Workers, Sean Dewart, threatened to withdraw from the pension talks because protection for pensions was part of the cost-cutting agreements the unions reached with Air Canada in May and June.

Mr. Justice James Farley ordered both sides to continue talks and find a resolution promptly, though he did not specify a deadline.

He also extended Air Canada's bankruptcy protection, which had been set to expire this month, to Dec. 20.

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