Airline Prepares for Gradual Shutdown Amid Possible Labor Dispute This Week
Air Canada has announced that it will suspend air cargo shipments on September 19 if pilots follow through on their strike threat due to unresolved labor negotiations. The airline is currently developing contingency plans for a phased shutdown of its operations.
Discussions between Air Canada and the Air Line Pilots Association (ALPA), which represents over 5,200 pilots at Air Canada and Air Canada Rouge, have stalled. Both parties are significantly apart on contract terms. If no agreement is reached by Sunday, either side may issue a 72-hour notice for a strike or lockout, prompting the airline’s three-day shutdown plan.
Air Canada CEO Michael Rousseau stated, “We believe there is still time to reach an agreement with our pilots, provided that ALPA moderates its wage demands, which far exceed the average wage increases in Canada. We apologize for the inconvenience this may cause our customers, but a managed shutdown is the only responsible option available.”
The airline is informing travelers and cargo shippers about the impending work stoppage to help them adjust their arrangements. Last week, Air Canada mentioned it would soon stop accepting certain shipments to reduce disruption risks. Specifically, bookings for live animals, horses, and human remains must be completed no later than Tuesday. After Thursday, Air Canada will not accept temperature-controlled items, pharmaceuticals, fresh food, high-value or hazardous goods, or domestic express parcels.
Air Canada operates a fleet of 252 aircraft across 47 countries, including 35 wide-body and freighter flights to the U.S. each week. The airline commenced services in June with a Boeing 767 freighter to Chicago O’Hare from Toronto three times a week, also serving Atlanta, Los Angeles, and Miami.
If a contract agreement is not reached, Air Canada plans to methodically cancel flights over three days, leading to a complete shutdown as early as 12:01 a.m. ET on the following Wednesday. Some aircraft may be grounded as soon as Friday. This gradual shutdown will enable the airline to reposition crews and aircraft systematically, facilitating a swift return to normal operations once the labor dispute is resolved.
According to Air Canada, it could take seven to ten days to resume normal services after a complete shutdown. The collective bargaining discussions between Air Canada and ALPA have been ongoing for 15 months. Following 60 days of government mediation that ended on August 30, a three-week cooling-off period commenced before either party could take action. ALPA pilots have recently authorized their leaders to call for a strike if negotiations remain stagnant. Reports suggest Air Canada has offered pilots a 30% pay raise, with a minimum initial increase of 20%, followed by annual raises over the next three years.
Air Canada argues that while it aims to maintain the position of having the highest-paid commercial pilots in Canada, it is unreasonable for pilots to expect wages comparable to those of U.S. airlines, such as Delta and United, which operate under different market conditions and have enjoyed greater revenue opportunities. Wage rates for Delta’s pilots have been reported to be up to 45% higher than those of Air Canada pilots.
In contrast, WestJet, Canada’s second-largest airline, secured a last-minute deal with its pilots last summer that averted potential strike action. The airline had been attempting to launch its all-cargo operations with converted Boeing 737-800 freighters, but it temporarily shut down its freighter network earlier this year due to slow business activity.
Last month, Canada’s freight market experienced disruptions due to a brief 24-hour lockout of workers by railroads, which was resolved after the federal government intervened and mandated reopening while sending the dispute to binding arbitration.
