Air Canada has reached a tentative four-year collective agreement with the Air Line Pilots Association (ALPA), which represents more than 5,200 pilots at Air Canada and Air Canada Rouge, just in time before a feared strike or shutdown was set to happen.

On September 15, hours before Canada's largest airline or ALPA, was set to issue a 72-hour strike or lock-out notice, which would trigger the carrier's three-day wind-down plan, both parties reached a deal with the pilot union.

"The new agreement recognizes the contributions and professionalism of Air Canada's pilot group while providing a framework for the future growth of the airline," Air Canada said.

"Terms of the new agreement will remain confidential pending a ratification vote by the membership, expected to be completed over the next month, and approval by the Air Canada Board of Directors," it added.

ALPA confirmed the deal, saying separately that Air Canada pilot union leaders approved the tentative agreement for member ratification.

"The Air Canada Master Executive Council (MEC) of the Air Line Pilots Association, Int'l (ALPA), representing more than 5,400 Air Canada pilots, voted to approve a Tentative Agreement (TA) on modified terms for their Collective Agreement," ALPA said in a statement.

"If ratified, the TA will generate an approximate additional US$1.9B of value for Air Canada pilots over the course of the agreement," the pilot union added, noting that ratification requires approval by a majority of the voting membership, who will soon receive the Tentative Agreement for review.

With the strike or shutdown averted, the airline said Air Canada and Air Canada Rouge will continue to operate normally.

Air Canada has already announced its plan for an orderly shutdown as early as September 15, should both parties fail to reach an agreement. It said that a managed shutdown is the "only responsible course available to the airline."

On September 12, Air Canada also urged the Federal Government to direct arbitration to avert the disruption in travel and transport of time-sensitive cargo shipments.

By then, Air Canada said a tentative agreement had been reached on 70% of the more than 1,000 proposed changes suggested by ALPA. The negotiations have stalled over wages, and both parties will be in a legal strike or lock-out position as early as September 18.

"With talks nearing an impasse and time for negotiation running out, the travel plans of hundreds of thousands of Canadians are hanging in the balance. We are taking all measures to mitigate any impact, but the reality is even a short work stoppage at Air Canada could, given the complexity of our business operating on a global scale, cause prolonged disruption for customers," said Michael Rousseau, president and chief executive of Air Canada.

"So, while we remain committed to reaching a negotiated settlement with ALPA, the federal government should be prepared to intervene if talks fail before any travel disruption starts."

Air Canada said then that it is not seeking immediate intervention; however, the carrier believes the Government of Canada should prepare in the event talks conclude without an agreement to use its powers to direct binding interest arbitration under Section 107 of the Canada Labour Code before a work stoppage becomes effective.

Meanwhile, ALPA responded on September 13 urging the Canadian government to respect worker rights.