Air Canada labor deal may reshape pay for North American airline crews

MONTREAL/CHICAGO (Reuters) - A crippling strike by Air Canada flight attendants that grounded thousands of flights over wages and unpaid labor is the latest blow to the airline industry's compensation system that does not fully pay cabin crews for their hours at work.

The union, representing more than 10,000 Air Canada flight attendants, said on Tuesday they reached a tentative deal that ends unpaid work. Analysts say any gains could influence upcoming contract negotiations in North America.

According to a union official, the deal would pay flight attendants for an hour before flights on narrowbody jets and 70 minutes on larger widebody aircraft, at half of their normal hourly rate in year one, rising to 70% by year four.

Air Canada’s earlier offer was half pay for 45 minutes for narrow body jets, and 60 minutes for wide body aircraft.

The deal could also drive up structural costs in a cyclical industry. Labor is airlines' biggest operating expense after fuel.

The four-day strike that stranded more than 500,000 passengers mirrors unrest at U.S. carriers, where flight attendants cannot walk off the job until the National Mediation Board grants permission. But cabin crews at American, Southwest, and Alaska Airlines last year rejected several contract deals, saying they did not address concerns about unpaid work.

Flight attendants at United Airlines last month voted down a $6-billion tentative labor agreement, which did not provide compensation for time on the ground before and after flights.