Pilots at Canada’s largest airline voted in favor of a new four-year agreement last week, which now stands as Air Canada’s largest-ever labor contract. The agreement between Air Canada and the Air Line Pilots Association, International (ALPA) was reached in September on the brink of a potential strike or lockout.

According to the union, 99% of the airline’s over 5,200 pilots participated in the vote, with 67% voting in favor. A key objective of the union was to bring pilot compensation closer to that of their counterparts in the United States.

A Widening Pilot Pay Gap

The last agreement between Air Canada and its pilots was signed in 2014 and gave pilots a two percent annual increase. This has led to a growing wage gap between Air Canada pilots and their counterparts at large American carriers during the last decade.

Over the past few years, airlines in the United States have signed record-breaking agreements with their pilots. The trend began at Delta when its pilots ratified a contract in early 2023 that gave them 34% raises over four years, in addition to other qualify-of-life improvements.

United and American pilots followed suit in the coming months, winning pay raises of up to 40% and 46% over four years, respectively. Southwest pilots have since negotiated salary increases totaling up to 50% over four years.

Amid this landscape, Air Canada pilots were quick to note that they operate many of the same routes as pilots at these U.S. airlines. Pointing at United, Charlene Hudy, chair of ALPA’s Air Canada unit told The Canadian Press: “We all fly passengers under the Star Alliance. So we’re flying the same passengers in the same airspace on some of the very same routes, and those pilots are being compensated dramatically more than us.”

Comparison: Air Canada Pilot Pay vs U.S. Pilot Pay

The new Air Canada pilots’ agreement gives pilots an immediate 26% pay increase, followed by four percent increases in each of the following years. This would give pilots a salary bump of approximately 42% over four years.

While the percentage increase in pay appears comparable to what pilots in the United States have obtained, the actual salary gap will remain. For example, the new agreement means that new Air Canada pilots now earn 87.48 Canadian dollars ($63) per hour in their first year, compared to $91 at United, $116.05 at American, and $125.52 at Delta.

Southwest pilots are not paid by the hour, but a new first officer earns the equivalent of approximately $133 per hour. The first-year Air Canada pilot pay comes out to 78,732 Canadian dollars ($57,071), which is considerably less than the $70,000 to $100,000 earned by new pilots at major airlines in the United States.

The gap is similar on the higher end of the pay scale as well. A Boeing 787 pilot at Air Canada with 12 years or more at the company now earns 389.96 Canadian dollars ($283) per hour or approximately 350,964 Canadian dollars ($254,405) annually. As a point of comparison, American Airlines pilots with the same amount of company seniority flying the Boeing 787 earn base salaries of $447.24 per hour, or over $400,000 per year.

New Air Canada pilots are also subject to a fixed pay scheme for their initial years at the company. Also referred to as flat pay, Air Canada pilots would previously earn fixed salaries (unless they flew more than 75 hours per month, after which they received an hourly rate) for their first four years, with no eligibility for night flying pay or overseas premiums. The new agreement shortens the fixed pay period to two years.

Unlike their U.S. counterparts, all Air Canada pilots are also part of a pension plan. There is a discrepancy between new pilots and their more senior colleagues here as well. New pilots participate in a defined contribution plan, which pays retirement benefits depending on market growth. However, more senior pilots are grandfathered into a more stable and rare defined benefit pension, which offers a fixed annual payout after retirement.

Does Air Canada Have the Best Paid Pilots in Canada?

Both the union and company have asserted that Air Canada has the best-compensated pilots in the country. “The agreement is mutually beneficial and it will keep our pilots the best compensated in Canada and provide the work-life balance improvements they were seeking,” Air Canada President and Chief Executive Officer Michael Rousseau said in a press release.

Hudy expressed the same sentiment when speaking to reporters at a press conference following the vote on the new agreement. “I think when you’re looking at…the total compensation package, you’ll find that with our pension ability and even our expenses abilities under this new contract with Air Canada, we are the highest paid pilots in Canada,” she stated.

While Air Canada undoubtedly offers the broadest range of career opportunities for pilots in the country due to its size, its pilot pay is not universally higher than that of its Canadian competitors. Flair Airlines first officers start at 100 Canadian dollars ($72) per hour, while Air Canada pilots only receive 87.48 Canadian dollars ($63) that new Air Canada pilots make in their first year under the new agreement.

A second-year Porter Airlines Embraer E195-E2 first officer would make 100 Canadian dollars ($72). Meanwhile, an Air Canada first officer in their second year at the company would receive 94.81 per hour ($69), even if they were flying long-haul flights on a widebody type.

When pressed on this matter, Hudy defended the disparities by pointing to other forms of compensation and potential career opportunities. “I can certainly appreciate that on the junior end of the pay scale, there are some places where when we’re comparing ourselves to some of our Canadian counterparts it’s not exactly the same pay. What I can offer is that…being at an airline like Air Canada, your potential career opportunities for progression can be different than at other airlines and there’s also the pension, the benefits, and some expenses that also contribute to the lower end of the pay scale.”

The earning potential for Air Canada’s senior captains is notably higher than that of any other Canadian airline. As a point of comparison, the highest pay for a Boeing 787 captain at WestJet – where the pilots ratified a new collective agreement last year – is currently 335.25 Canadian dollars ($243) per hour, while senior Air Canada 787 captains can make 389.96 Canadian dollars ($283).