Air Canada preparing for shutdown as union talks near impasse

Air Canada is finalizing contingency plans to suspend most of its operations as talks with the pilot union are near an impasse, the airline said on Monday.

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's pilots have been advocating for unprecedented wage increases to close the salary disparity with their higher-earning U.S. peers, who achieved record contracts in 2023 amid pilot shortages and robust travel demand.

The union and the airline had entered into a three-week cooling off period, which is mandated by Canadian law, on August 27.

The airline and its unit Air Canada Rouge are preparing to gradually suspend flights over three days, potentially starting as early as Sept. 15.

Unless an agreement is reached, beginning Sunday, the carrier or the union are likely to issue a 72-hour strike notice or a lock-out notice that triggers the three-day wind down plan.

"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 on Monday.