Air Canada is finalizing plans to suspend most of its operations, likely starting Sunday, as talks with the pilots’ union reach an impasse over “inflexible” pay demands, the country’s largest airline said Monday. Air Canada and its low-cost subsidiary Air Canada Rouge together operate nearly 670 flights per day.
Unless they reach a settlement with the Air Line Pilots Association, the closure could affect 110,000 passengers a day. The airline’s pilots have been trying to close the pay gap with their American counterparts, who signed lucrative employment deals in 2023 amid a pilot shortage and strong travel demand.
“Air Canada must stop threatening to disrupt air travel and come to the negotiating table with serious proposals to keep Canada’s flagship airline competitive in the global aviation market,” said Charlene Hudy, president of the local union representing the airline’s pilots. Talks between ALPA, which represents more than 5,200 pilots at the airline, continue, but the two sides remain far apart, the company said.
“Air Canada believes there is still time to reach an agreement with our pilot group, provided ALPA moderates its wage demands that far exceed average Canadian wage increases,” said CEO Michael Rousseau. ALPA pilots have previously said that current pay rates at U.S. rival Delta Air Lines are up to 45 percent higher than the Canadian airline’s hourly wages.
“We appreciate their (Air Canada pilots’) frustration, but also note that the situation is not exactly apples-to-apples given the entry barriers surrounding the U.S. pilot supply,” TD Cowen analyst Thomas Fitzgerald wrote in a note last week note.
On August 27, the union and the airline entered a mandatory three-week cooling-off period, during which the union cannot strike. Air Canada expects it will take seven to 10 days to resume normal operations once the full shutdown is implemented. The company said it is in discussions with other airlines to accommodate stranded passengers in the event of flight cancellations.
“Our government firmly believes in the collective bargaining process and Canadians are counting on the parties to reach an agreement,” said a statement from the office of Canadian Labor Minister Steven MacKinnon.
