Air Canada and the union representing its 8,600 mechanics, baggage handlers and cargo agents struck a new agreement, Air Canada said on Sunday.
The new five-year collective agreement with the International Association of Machinists and Aerospace Workers(IAMAW) maintains the current defined benefit pension plan for current employees.
Effective until March 31, 2016, the deal, which was an arbitrator's selection of Air Canada's final offer, also introduces a new multi-employer pension plan for new employees and contributes to the reduction of the pension deficit.
Canada's biggest airline has been struggling with union disputes and rising costs. The deal with IAMAW caps 14 months of negotiations.