By Allison Lampert
MONTREAL (Reuters) – Bombardier Inc. employees on a key program for the Canadian business jet maker will decide on Wednesday whether to accept a new contract offer or walk off the job.
The Montreal-based company’s labor dispute is one of many aviation and aerospace industries facing the aviation and aerospace industries globally, as demand travel rebounds in the wake of the COVID-19 pandemic and soaring prices push unions to demand bigger wage increases.
Rejection of the deal offering wage increases of up to 18.5% over five years would lead to a general strike by 1,800 workers, who mainly produce Bombardier’s popular Challenger business jets which accounted for a third of deliveries of the company in 2021.
Companies from Bombardier to some European airlines are experiencing wage disputes with workers amid rising inflation, adding to growing cost pressure and discontent as the summer travel season started.
In the United States, pilots from nearly every major carrier are protesting, demanding higher wages and contract improvements due to “tiring” schedules.
Aviation has been battered during the COVID-19 pandemic, with 2.3 million jobs lost worldwide by some estimates, compounding existing personnel shortages. As the workers return, it gives weight to personnel like the pilots in the talks.
“Labour has a lot of power right now and they have inflation in their own lives,” said Richard Aboulafia, managing director of AeroDynamic Advisory.
“And in the case of aviation, a lot of them have recently been laid off or furloughed, so they don’t feel a lot of loyalty.”
Cabin crew at low-cost carrier Ryanair in Spain and Portugal plan to strike on Friday, with work stoppages expected elsewhere in Europe.
Countries around the world are grappling with high inflation, as strong demand comes up against supply chain constraints and Russia’s invasion of Ukraine pushes commodity prices sharply higher.
Aboulafia said aerospace sectors like defense and freight can more easily pass on rising costs to customers. Airlines are more vulnerable as they risk losing demand as fares rise.
“My big fear in all of this is that you might see some sort of crowding out where the defense gets used to paying more and that has a business impact because they’ll find it harder to match,” Aboulafia said.
The International Association of Machinists and Aerospace Workers, which reached an agreement in April with “historic” wage increases for 5,000 workers at Lockheed Martin Corp in Fort Worth, Texas, has begun talks with the defense unit of Boeing Co.
The union and Bombardier would not discuss the details of the offer before the vote. Bombardier stock fell 12% this week in Toronto.
The union also negotiated a new contract for customer service agents at Southwest Airlines Co. after twice reaching a tentative agreement. The latest deal, which was rejected by South West workers in May, included a 15% pay rise over three years and a signing bonus.
(Additional reporting by Rajesh Kumar Singh in Chicago, editing by Deepa Babington)