Air Canada returns to full speed for now

Air Canada customer service and sales staff returned to work Friday, a day after a tentative agreement was reached three days into a walkout.

Despite the deal, contract talks stillremain withthe airline's flight attendants, pilots, mechanics and baggage handlers, meaning there could be more work stoppages in the future.

The tentative four-yearpact between the airline and the Canadian Auto Workers union representing the 3,800workerson strike created some slowdowns and delays for travellers, but no major upheavals.

A ratification vote is expected in the next two weeks.

The tentative pact addresses quality of life issues andretainsadefined-benefit pension plan for current workers.

CAW union president Ken Lewenzasaid there would be"very slight modifications" to the existing pension plan, but noted none of those modifications will go into effect until 2013.

Lewenza said the issue of what type of pensions new hires will receive a sticking point in negotiations will go to arbitration.

"I want to begin by saying sincerely to future workers at Air Canada, we regret that we were not able to put in our collective agreement your desire to have a defined benefit plan," Lewenza said Thursday.

"We have agreed to send that issue to arbitration."

Airline 'very pleased'

Air Canada wanted new hires to be included in a defined-contribution plan instead of the defined-benefit plan that current employees have, because that would potentially save the airline money.

Chief operating officer Duncan Dee said the airline was "very pleased" to have reached a tentative agreement with the CAW.

"The agreement will help ensure the long-term sustainability of Air Canada while maintaining industry-leading compensation and benefits for our employees," he said in a statement.

On Friday, the airline began offering a 15 per cent discount as a thank you to customers booking travel within Canada and the United States. Bookings to get the markdown must be made by midnight Sunday.

"We are pleased that the recent labour dispute has been resolved and it's business as usual," Air Canada says on its website.

News of the tentative deal came shortly after the government tabled back-to-work legislation.

Labour Minister Lisa Raitt said she was pleased with the way the process unfolded and congratulated CAW and Air Canada for "putting the public interest first."

"I know that putting the legislation on the order paper and following through in process today was a tool that was needed in order to focus the parties and narrow the issues and get them to where they are," Raitt said.

Lewenza, however, reiterated his criticism of the legislation at a news conference Thursday, saying there "should not have been any intervention by government."

"We believe we could have gotten an agreement maybe even quicker than today without the intervention of government. Because we were awfully close prior to the government introducing legislation."

Contract talks with flight attendants

Air Canada'snext round of negotiations is with the union representing 6,800 flight attendants, who are currently waiting for the appointment of a federal conciliator, which should comenext week.

The union said the flight attendants could be in a legal strike position by mid-August, but Air Canada which said it looks forward to negotiated settlements with all its labour groups says the legal strike position isn't before September.

The International Association of Machinists and Aerospace Workers union representing mechanics and baggage handlers at Air Canada will be back at the bargaining table in July.

The airline and its pilots are also set to return to the bargaining table after union members rejected a tentative agreement earlier this year.

The unions each say the main issue is over the establishment a defined contribution pension plan for new hires, instead of the current defined benefit plan the same sticking point as with the customer service workers.