Air Canada's baggage handlers, ground crews and maintenance workers on Wednesday rejected a tentative deal signed earlier this month with Canada's biggest airline, shortly after its dispatchers ratified a new contract.

Workers represented by the International Association of Machinists and Aerospace Workers voted nearly two thirds — 65.6 per cent — to reject an earlier deal that gave them wage, benefit and other increases.

That vote came a day after the carrier said its 74 flight dispatchers based near Toronto Pearson International Airport had backed the new contract that expires in 2016.

A spokesman for IAMAW — Air Canada's largest union with about 8,600 members — said the workers also gave the union 78 per cent support to call a strike if a new deal can't be reached.

"It doesn't necessarily mean we will go on strike," Bill Trbovich said in an interview late Wednesday.

"It means that they have the support of the membership if it comes to that."

Years of labour issues

Air Canada has had labour troubles for years and bitterness remains among its workers who have sought to win back concessions and pay they gave up to help the Montreal carrier restructure under bankruptcy protection in 2004.

At that time, the airline cut jobs, pay and benefits, pared back its fleet and reduced debt to stay alive in the wake of the global airline collapse caused by the 9-11 attacks on the United States more than a decade ago.

"Like all other workers at Air Canada, it's a case of they want back the money they gave up to restructure the company back in 2004, and that hasn't been forthcoming," Trbovich said.

"They're upset about a lot of things, some of them I'm not aware of. There's a lot of dissatisfaction there that's been building up ever since, and as a result they turned it down."

The two sides were in conciliation when the tentative deal was reached.

"We'll meet next week with people from across the country and go through what has transpired so far and where we're going to go and basically prepare for going back to the table with Air Canada," Chuck Atkinson, directing general chairperson and president for IAMAW district 140, said in an interview.

Hopes to avoid disruption

The airline said in a release there's enough time for the both parties to avoid a disruption.

"Air Canada confirmed it is business as usual for the airline and that its customers can continue to book Air Canada flights with confidence."

Other workers, including flight attendants and pilots, rejected earlier deals their union has negotiated at Air Canada. The pilots are at the bargaining table with the carrier now.

The airline was also hit by a short strike last spring by customer service agents, who later settled when the federal government was preparing back-to-work legislation.

Air Canada had a big loss last year and faces tough competition from WestJet, Porter and Air Transat, who fly with lower labour costs and can undercut prices.

As well, Air Canada faces rising fuel bills and other higher costs on operations, which it is trying to control.