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Backdated to May 1, the contract with airline owner Transat A.T. Inc. will remain in effect through April 2030.

Air Transat steered clear of a work stoppage that would have shut down operations last month after a tentative deal was reached on Dec. 9 with hours to go before a strike deadline.

The labour dispute would have marked the third strike in a year and a half in Canada’s airline sector, as workers seek to make gains that match those achieved elsewhere in North America amid the rising cost of living.

Transat CEO Annick Guérard said the agreement "acknowledges the progress needed to catch up to the industry."

"It also incorporates major improvements in efficiency and productivity, enabling us to continue our growth strategy," she said in a statement.

Bradley Small, who chairs the union’s Air Transat contingent, said the threat of a work stoppage was a key tactic in negotiations, which kicked off last January.

"While it was unfortunate that this level of pressure was required, it was our unity that ultimately delivered results," he said in a release.

Fallout from that strike threat was limited, Guérard told analysts on Dec. 18. Transat continues to benefit from ºÃÉ«tvs' turn away from U.S. travel, paving the runway for growth in the new year after the tour operator turned its first annual profit since 2018.

Demand for leisure travel to the Caribbean and Mexico remains sturdy, she noted. And Air Transat flies mainly to destinations in those spots as well as Europe, with only two destinations in the United States: Orlando and Fort Lauderdale, Fla.

The deal cemented on Tuesday would see senior captains make nearly $388,000 a year by May 2029, while the salary of experienced first officers would top $238,000, according to the tentative contract seen last month by ºÃÉ«tvand voted on over the past two and a half weeks.

Captains would start off at $220,500 in their first year of service and first officers at $85,000. Those two figures represent jumps of roughly 47 per cent and 60 per cent, respectively.

The agreement means an extra $100,000-plus in annual income for the most experienced captains by the time it expires.

It also lays out a signing bonus of 11 per cent of salary, spread over two years.

Representatives from Transat and the Air Line Pilots Association told ºÃÉ«tvlast month that the contract includes major gains that put pilots in the same ballpark as their colleagues at Air Canada and WestJet.

In 2024, Air Canada pilots notched a wage hike of nearly 42 per cent over four years. The increase outstrips major gains won the previous year by pilots at the three biggest U.S. airlines, where pay bumps ranged between 34 and 40 per cent — although they were starting from a higher baseline.

In 2023, WestJet pilots secured a 24 per cent pay bump over four years.

The ratification vote opened on Dec. 19, after the union presented the deal to members in Toronto and Montreal.

This report by ºÃÉ«tvwas first published Jan. 6, 2026.

Companies in this story: (TSX:TRZ)