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Air Canada preparing for potential shutdown as contract talks remain far apart

Air Canada is preparing for a potential shutdown of most operations next week as it says contract talks with its pilots’ union remain far apart.

The airline said Monday that some services such as freight are already being affected and it would have to start grounding aircraft as early as Friday ahead of a potential strike notice on Sunday.

Air Canada said it’s increasingly likely that there will be a work stoppage, and that it will begin an orderly shutdown of Air Canada and Air Canada Rouge once 72-hour strike or lock out notice is given.

Unless an agreement is reached either side could issue notice as early as Sunday, which could lead to a full work stoppage as early as Sept. 18.

Talks remain stuck over what the airline calls the Air Line Pilots Association’s “excessive” wage demands, said Air Canada chief executive Michael Rousseau in a statement.

“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.”

The union said on Monday that it was corporate greed that was holding up talks, as Air Canada continues to post record profits while expecting pilots to accept below-market compensation.

“Air Canada should stop threatening to disrupt air travel and come to the bargaining table with serious proposals,” said Charlene Hudy, head of the union’s Air Canada contingent, in a statement.

The airline said some services such as holiday packages could see a wind down as early as Friday, while it has already started limiting acceptance of some goods in its cargo division.

The overall shut down of operations will take time as Air Canada and Air Canada Rouge operate close to 670 daily flights on average and carry more than 110,000 passengers.

If all flights are suspended in a work action, Air Canada says resuming normal operations will take as much as seven to 10 days. Air Canada Express flights will continue to operate during a strike, the airline said.

The airline is allowing customers with bookings between Sept. 15 and 23 to make changes if they want to at no cost, or to receive a credit for future travel. It says the policy will be expanded as warranted.

However customers won’t be eligible for extra compensation, as under the rules labour disruptions are considered outside of the airline’s control.

Air Canada said a tentative agreement has been reached on a large number of items during the more than yearlong contract talks, but wages remain a key sticking point.

The ALPA, which represents more than 5,200 pilots at Air Canada, is pushing to see salaries align closer to what pilots in the U.S. make after some steep raises recently.

Following new contracts between the four biggest U.S. airlines and their pilots over the past 18 months, some flight crews earn roughly double what their counterparts at Air Canada make, the ALPA has said. United Airlines secured up to 40 per cent wage increases over four years, while WestJet pilots secured a 24 per cent pay bump.

According to a source close the bargaining table, Air Canada is offering a 30 per cent pay hike over four years, plus improvements to benefits. The source said pilots are asking for pay hikes of between 30 and 60 per cent.

Air Canada pilots in August voted 98 per cent in favour of a strike mandate, which the union said showed pilots were willing to go the distance to secure their desired contract.

The Association of Canadian Travel Agencies and Travel Advisors last week called on the federal government to help find a resolution to avert another significant challenge facing the travel industry.

Canada’s transportation industry has already seen brief twin shutdowns at Canada’s main railways as well as a strike at WestJet this summer.

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This report by The Canadian Press was first published Sept. 9, 2024.

News from © Canadian Press Enterprises Inc., 2023