UK Pilots May Strike

CHC Helicopter Corporation advises that BALPA, the union representing pilots employed by its UK operating subsidiary, CHC Scotia Limited, yesterday issued a letter notification rejecting CHC's most recent financial offer and electing to ballot its membership for a decision on whether to initiate industrial action. BALPA intend to commence balloting on October 3rd, which will continue over a period of 7 to 21 days. No withdrawal of services is permitted under UK law except after a majority approval of such action by the pilot workforce and a further 7 days formal notice to CHC of the results of the vote. Accordingly, this process could extend throughout the month of October.

CHC Scotia has already honored and enhanced the existing two-year pay agreement with its UK pilots which was scheduled to run until April 2002 (but was reopened early by BALPA). During negotiations to date, CHC Scotia has tabled proposals with substantial salary increments annually for a three year term commencing May, 2002, as well as enhancements to the existing final salary pension scheme.

CHC stated it is confident that its final offer of increased salary and pension benefits over the next three years is exceedingly fair to its pilot work force, as compared to others in the same profession worldwide and also to fixed wing pilots going forward. CHC Scotia is in constant communication with its UK customers on the status of negotiations, and with respect to the recent pressure from BALPA. CHC will also ensure all pilots are made fully aware of the positive attributes of its three-year offer, as well as the changing marketplace.

CHC's final offer underlines its total commitment to attracting and retaining skilled and experienced pilots who are essential for CHC's operations. CHC also invests in extensive in-house pilot training. While CHC intends to fairly compensate its pilots, we and the pilots must recognize the constraints imposed by the competitive environment within which CHC operates. Although the prospect of some work interruption concerns us and our customers, CHC must control its own costs within reasonable limits, in order to retain and attract offshore contracts for the benefit of its operations and its entire work force. CHC does not anticipate that this threat of industrial action will have a material adverse effect on the Corporation.