Canada – August 15, 2025

A major labor dispute at Canada’s largest airline, Air Canada, has reached a critical point, leading the company to begin canceling flights and brace for a potential complete shutdown. The move comes as the Canadian Union of Public Employees (CUPE), which represents over 10,000 flight attendants, has issued a strike notice, with a deadline set for early Saturday morning. The resulting flight cancellations are already impacting tens of thousands of travelers, with the airline warning of a complete grounding of its mainline and Air Canada Rouge operations.

For months, negotiations between Air Canada and CUPE have been at an impasse over key issues, primarily wages and compensation for unpaid work. The union has argued that flight attendant pay has not kept pace with inflation, and has been pushing for full pay for all hours worked, including boarding and deplaning time. A recent offer by the airline, which included a 38% compensation increase over four years, was rejected by the union, which said it was still inadequate. The union’s overwhelming 99.7% strike mandate from its members underscores the deep frustration over these issues. In response, Air Canada has issued a lockout notice and started a “phased wind down” of its operations to prepare for a work stoppage.

Key Headlines

 * Flights Grounded: Air Canada has begun canceling flights and will fully suspend its schedule by Saturday morning if a deal with the flight attendants’ union is not reached.

 * 130,000 Passengers a Day at Risk: A full shutdown of the airline could impact up to 130,000 passengers daily, with an estimated 500 flights expected to be canceled by the end of Friday alone.

 * Wages and Unpaid Work: The main sticking points in the negotiations are flight attendant wages, which the union claims are “poverty wages,” and compensation for work performed on the ground during boarding and deplaning.

 * Binding Arbitration Rejected: The airline’s offer to enter into binding arbitration was rejected by the union, which prefers to negotiate a deal that its members can vote on.

 * Passenger Rights: Impacted customers are being notified by the airline and will be eligible for a full refund or, where possible, rebooking on other carriers, though many airlines are already at peak capacity during the busy summer travel season.

The Growing Crisis and its Impact on Travelers

The escalating dispute has created a travel nightmare for many, with flights being canceled and passengers left scrambling to make alternative arrangements. The airline has stated that the gradual suspension of operations is necessary for a safe and orderly restart, but even under the best circumstances, a full resumption of flights could take a week. This means that a potential strike could strand thousands of Canadians who are currently traveling abroad, as well as disrupt the plans of countless others during the busy summer season.

The financial fallout is also significant. Industry analysts estimate that the strike could cost Air Canada tens of millions of dollars a day in lost revenue, not including the broader economic ripple effects on the tourism industry. While the Canadian government’s Minister of Jobs and Families, Patty Hajdu, has met with both sides and federal mediators remain engaged, a resolution has not yet been found. The deadlock highlights the recurring tensions between employee demands and the airline’s financial pressures, a challenge that is often exacerbated by government intervention aimed at protecting the economy.