Air Canada set to wind down operations ahead of ‘increasing likely’ strike
Air Canada says it is preparing to wind down operations ahead of an “increasingly likely” strike or lockout as contract talks with its pilots union yield no signs of a deal.
The Montreal-based carrier and the Air Line Pilots Association (ALPA), which represents 5,200 pilots at Air Canada and Rouge, have been in negotiations for more than a year. The two sides are in a legal strike or lockout position on Wednesday, Sept. 18, provided they issue 72 hours’ notice.
Air Canada said on Monday such a notice will trigger its three-day plan to progressively suspend all flights by Sept. 18, and that the two sides are “far apart” at the bargaining table.
Aircraft groundings for some foreign travel and sun destinations will begin as early as Sept. 13, to avoid leaving customers, crew and planes stranded, the airline said.
A shutdown would affect more than 110,000 passengers a day on 670 domestic and international flights.
The union has said it is seeking wage increases that will bring its members in line with their North American counterparts, better retirement benefits and quality-of-life improvements.
Charlene Hudy, the Air Canada pilots’ union leader, said the airline has been making record profits while expecting pilots to accept below-market wages. “Air Canada should stop threatening to disrupt air travel and come to the bargaining table with serious proposals to keep the flagship Canadian carrier competitive in the global aviation market,” Ms. Hudy said in a statement on Monday.
The two sides are in talks this week in Toronto.
In 2023, Air Canada captains were paid between $215,000 and $352,000, the airline said, depending on seniority, the plane flown and other variables.
A 10-year contract with Air Canada pilots that expired last year provided yearly raises of about 2 per cent. Meanwhile, their counterparts at other airlines last year enjoyed large pay increases amid a pilot shortage. Crews at WestJet Airlines Ltd. last year reached a deal for 24-per-cent raises over four years; Delta Air Lines pilots will see their wages rise by 34 per cent over the same period.
Air Canada is letting customers change their flights at no charge, depending on booking and travel dates, and is lining up a “very limited” number of seats on other airlines for travellers whose flights are cancelled. Customers with cancelled flights are entitled to refunds or credits, but not compensation for inconvenience, lodging or food under federal rules, Air Canada says, because labour disruptions are outside its control.
Any disruptions will spill over into other countries and affect other airlines and their passengers. Air Canada is a member of the Star Alliance airline group, in which carriers sell seats on other members’ aircraft. For instance, passengers travelling to Colorado from Munich might fly with Air Canada or Lufthansa to Toronto and transfer to a United Airlines plane for the final leg. This means a strike, lockout or cancellation at Air Canada will begin at Toronto, Vancouver or any of its other domestic hubs and cascade through the global network.
Chicago-based United Airlines has warned its customers their travel to or from the nine major Canadian airports might be disrupted between Sept. 15 and 23. The airline is waiving the fees to change or cancel flights. Star Alliance members Lufthansa and TAP Air Portugal did not respond to e-mails on Monday.
Cameron Doerksen, a stock analyst at National Bank of Canada, said Air Canada has the cash to withstand a shutdown but the financial effects would be significant. He said the airline lost about $9-million a day in profit before taxes in the early stages of the pandemic.
The airline made a profit of $2.3-billion in 2023, and had $8-billion in cash in June, 2024. Air Canada can afford to pay its pilots more, Mr. Doerksen said, but needs to keep its labour costs in line with WestJet and other Canadian rivals. “However, the union, represented by ALPA, is insisting on wage increases that would make Air Canada pilots much closer to U.S. mainline peer group airline wage scales,” Mr. Doerksen said in a note to clients on Monday, adding this would put Air Canada at a competitive disadvantage.
This article was first reported by The Globe and Mail
