Air Canada is facing a historic crisis as a strike by 10,000 flight attendants, represented by the Canadian Union of Public Employees (CUPE), has been declared illegal by the Canada Industrial Relations Board (CIRB), but the union continues to defy a federal back-to-work order. The airline has responded by suspending its financial guidance for the third quarter and full year 2025, reflecting severe operational disruption and ongoing financial uncertainty.
The Canadian Industrial Relations Board directed Air Canada and Air Canada Rouge flight attendants to “resume their duties” by 2 p.m. ( 2025 ). ET Sunday after Jobs Minister Patty Hajdu imposed binding arbitration and extended the existing contract until a new agreement is reached.
Impact on operations and customers
- Air Canada said hundreds of flights were canceled, with disruption affecting about 130,000 passengers per day during peak summer travel; by late Monday morning, over 500 flight cancellations were recorded, with the airline aiming to resume limited operations in the evening if possible.
- The airline urged travelers not to go to airports unless rebooked on other carriers and cautioned that capacity constraints make reaccommodation difficult amid summer demand.
The ruling and the union’s defiance have left travelers in limbo, with flight cancellations and delays expected to persist. The Canadian Union of Public Employees (CUPE), representing cabin crew, is seeking higher pay and compensation for on-the-ground duties such as boarding assistance, arguing that current wages only apply when aircraft are in motion. Industry analysts warn that if the standoff continues, Air Canada risks losing market share to competitors and suffering long-term financial consequences.
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After around eight months of contract negotiations, Air Canada and the Canadian Union of Public Employees have not yet reached a tentative agreement.
When the union put it to a vote at the end of July, 99.7% of members supported going on strike. Air Canada received a 72-hour strike warning from the union on Wednesday. In response, the airline issued a “lockout notice,” stating that it would not allow flight attendants to work on Saturday.
The airline’s plan to enter a binding arbitration process, which would have prevented flight attendants from quitting their jobs and allowed a mediator to determine the parameters of the new contract, was rejected by the union on Friday.