Air Canada is finalizing plans to suspend most of its operations, likely beginning Sunday, as talks with the pilot union near an impasse over “inflexible” wage demands, the country’s largest airline said on Monday.
The airline and its low-cost subsidiary Air Canada Rouge are preparing to gradually suspend flights over three days, potentially starting as early as Sept. 15. The carriers operate nearly 670 flights daily.
Unless an agreement is reached, the carrier or the union are likely to issue a 72-hour strike notice or a lockout notice that triggers a three-day wind down plan. The shutdown could affect 110,000 passengers daily.
Air Canada is allowing customers with travel scheduled between Sept. 15 and 23 to make changes right now to their booking at no cost. Customers can also elect to cancel flights and receive a credit for future travel instead.
If a strike or lockout notice is issued and a traveller’s flight is cancelled, Air Canada will notify those affected and they’ll be eligible for a full refund — but they won’t be entitled to any additional compensation under Canada’s existing Airline Passenger Protection Regulations.
Barry Eidlin, an associate professor of sociology at McGill University, said that the standoff between Air Canada and the pilots union is standard, as far as negotiations go.
He added that Canadians negotiating union contracts this year have done so in the context of high inflation, which “has really eaten into Canadian workers’ paycheques.”
“There is this game of catch-up being played, where workers are trying to make up for lost ground and especially … in the context of collective bargaining agreements that were negotiated prior to the inflationary climate,” he said.
‘Still time to reach an agreement,’ says Air Canada CEO
Talks between Air Canada and the Air Line Pilots Association (ALPA), which represents more than 5,200 pilots at Canada’s largest carrier, are continuing, but both parties remain far apart, the company said.
Air Canada and Air Canada Rouge are preparing to gradually suspend flights over three days, potentially starting as early as Sept. 15, as talks with the pilots union are near an impasse.
“Air Canada believes there is still time to reach an agreement with our pilot group, provided ALPA moderates its wage demands, which far exceed average Canadian wage increases,” CEO Michael Rousseau said in the statement Monday.
First officer Charlene Hudy, chair of the Air Canada master executive council for ALPA, told CBC News in a written statement that Air Canada “should stop threatening to disrupt air travel and come to the bargaining table with serious proposals.”
“Air Canada continues to post record profits — and reward its executives handsomely — while expecting pilots to accept below-market compensation,” Hudy wrote. “Now, because of their corporate greed, Air Canada is preparing to disrupt flights and inconvenience passengers.”
At 98 per cent, the pilots overwhelmingly voted in favour of the job action last month. The union and the airline had entered into a three-week cooling-off period, which is mandated by Canadian law, on Aug. 27.
Eidlin, the sociology professor, noted that pilots are distinct from workers in other industries, as they frequently interact with colleagues from other countries on a day-to-day basis.
“They are members of the same union, and they are talking to fellow workers who work for different airlines, and they know what these disparities are. And so that different context makes a huge difference in how people reference what their pay should be, what their expectations about pay should be,” he said.
“Our government firmly believes in the collective bargaining process and Canadians are counting on the parties to get a deal,” a statement from Canadian Labour Minister Steven MacKinnon’s office said.
Mike Springer, who lives in Bridgewater, N.S., is a lifelong Air Canada customer. But with an upcoming operation scheduled in Toronto, he and his wife decided not to risk a cancelled flight — and booked with WestJet instead.
Springer told CBC News he’s “100 per cent” on the side of the pilots.
“When you’re sitting beside a plane that’s on the tarmac and it’s a United flight, for instance, and flying to the same city as you are, and that pilot sitting in the front gets twice as much money as you do, I don’t think that’s fair,” he said.
As for WestJet, Springer said he has no complaints after booking this flight with the carrier.
“And maybe they’re going to get new customer out of this in the end.”
Pilots want to match U.S. counterparts
Air Canada’s pilots have been pushing to close their salary gap with their higher-earning U.S. peers, who achieved lucrative labour deals in 2023 amid pilot shortages and robust travel demand.
“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,” Hudy told The Canadian Press last month.
Air Canada is preparing to start cancelling flights ahead of a potential pilots’ strike next week, leaving passengers looking for other travel options.
ALPA’s pilots have previously said the current pay rates at U.S. rival Delta Air Lines are up to 45 per cent higher than the Canadian carrier’s hourly pay rates.
“We appreciate [the Air Canada pilots’] frustration, but also note that the situation is not exactly apples to apples given the barriers to entry around pilot supply in the U.S.,” TD Cowen analyst Thomas Fitzgerald wrote in a note last week.
Between March and September last year, pilots at Delta Air Lines, United Airlines and American Airlines secured agreements that included four-year pay hikes ranging from 34 per cent to 40 per cent.
Earlier this year, pilots at West Jet ratified a new deal, averting a strike.
Air Canada also anticipates it would take seven to 10 days for normal operations to resume once the complete shutdown is in place. Flights across its system would be cancelled over three days, with a total shutdown as early as 12:01 a.m. ET on Sept. 18.
The company is in talks with other airlines to accommodate its stranded passengers in the event of flight cancellations, it said, noting that flights under the Air Canada Express brand will continue to operate as they are operated by third-party carriers.