Air Canada (TSX:AC.B) has reached tentative deals with all five of its unions on a restructuring plan, officials said early Tuesday.

3-month TSX trading for Air Canada Agreements cover the Air Canada Pilots Association and the Canadian Union of Public Employees, which represents flight attendants, and include a pension funding holiday and equity restructuring.

The agreements are subject to a number of conditions including Air Canada raising new financing, ratification by union members and federal regulatory approval for the proposed changes to the pension contributions.

The Air Canada Pilots Association represents approximately 3,200 pilots and CUPE represents approximately 6,700 flight attendants.

The deals come a week after Air Canada announced it reached similar deals with the International Association of Machinists and Aerospace Workers, the Canadian Auto Workers and the Canadian Airline Dispatchers Association.

Those unions represent about 16,500 employees, or more than 60 per cent of the airline's unionized workforce in Canada.

"The agreements reached on pension deficit funding and labour contract extensions are critically important steps that will enhance Air Canada's ability to obtain additional financing to manage through the recession," Calin Rovinescu, Air Canada president and CEO, said in a statement released early Tuesday.

Seeking financing

The announcement on the tentative deal between Air Canada and its pilots union comes on the heels of reports that the airline is planning to seek about $600 million in financing, in part from government agencies, as part of its broad out-of-court restructuring.

Sources say details are still being hammered out.

Finance Minister Jim Flaherty said Tuesday that the federal government is in talks with Air Canada about loans.

"Air Canada has had some discussions with Export Development Canada about some possible borrowing on commercial terms, but those are discussions that are ongoing," Flaherty said.

Sources say the Conservative government has been asked to become a secured lender in exchange for a $200 million contribution. The funding would either come through the EDC's corporate account or from government coffers and would be administered by the arm's-length Crown corporation.

This was the path used to provide funding to Chrysler and General Motors.

However, the public might not ultimately be involved in funding the national carrier if Air Canada instead opts to proceed exclusively with private lenders.

Air Canada parent company ACE Aviation Holdings (TSX:ACE.B) is also expected to pony up some of its cash to help the airline.

Canada's largest carrier needs the money to help stay above the $800-million minimum cash balance required by one of its credit-card processors.

Analysts say failure to attract an infusion of cash could force the carrier to file for bankruptcy protection for the second time since 2003.

Air Canada's shares closed up 13 cents to $1.62 on the Toronto Stock Exchange.