Air Canada is finalizing contingency plans to suspend most of its operations as talks with the pilots union are near an impasse, the airline said in a statement on Monday.
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, the carrier or the union are likely to issue a 72-hour strike notice or a lockout notice that triggers a three-day wind down plan.
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 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 in the statement Monday.
At 98 per cent, the pilots overwhelmingly voted in favour of the job action last month. The union and the airline had entered into a three-week cooling off period, which is mandated by Canadian law, on Aug. 27.
Pilots want to match U.S. counterparts
Air Canada’s pilots have been advocating for unprecedented wage increases to close the salary disparity with their higher-earning U.S. counterparts, who achieved record contracts in 2023 amid pilot shortages and robust travel demand.
” … We’re flying the same passengers in the same airspace on some of the very same routes, and those pilots are being compensated dramatically more than us,” Charlene Hudy, head of the union’s Air Canada contingent, told The Canadian Press last month.
ALPA’s pilots have previously said the current pay rates at U.S. rival Delta Air Lines are up to 45 per cent higher than the Canadian carrier’s hourly pay rates.
“We appreciate [the Air Canada pilots’] frustration, but also note that the situation is not exactly apples to apples given the barriers to entry around pilot supply in the U.S.,” TD Cowen analyst Thomas Fitzgerald wrote in a note last week.
Between March and September last year, pilots at Delta Air Lines, United Airlines and American Airlines secured agreements that included four-year pay hikes ranging from 34 per cent to 40 per cent.
Earlier this year, pilots at West Jet ratified a new deal, averting a strike.
Air Canada also anticipates it would take seven to 10 days for normal operations to resume once the complete shutdown is in place.
Flights across its system would be cancelled over three days, with a total shutdown as early as 12:01 a.m. E.T. on Sept. 18.
The company is in talks with other airlines to accommodate its stranded passengers in the event of flight cancellations, it said, noting that flights under the Air Canada Express brand will continue to operate as they are operated by third-party carriers.
ALPA did not immediately respond to a Reuters request for comment.