Air Canada CEO sees big gap with striking union as minister orders airline pay probe

MONTREAL - Air Canada’s CEO on Aug 18 defended the airline’s offer of a 38 per cent boost in compensation to striking flight attendants but said there was a big gap compared with the union’s demand and did not offer a path to return to negotiations.

Hours later, Canadian Jobs Minister Patty Hajdu raised pressure on Air Canada, saying she was launching a probe into airline pay and that a negotiated agreement between workers and the company - who are not bargaining at the moment - would produce “the best deal”.

Ms Hajdu and Air Canada CEO Mike Rousseau’s comments followed the striking union’s refusal of a federal labor board’s order to return to work.

That refusal has created a three-way standoff between the company, workers and the government, and raised the stakes in a battle that has disrupted flights for hundreds of thousands of travelers during tourist season.

Flight attendants want higher wages and to be paid for time spent boarding passengers and other duties on the ground.

They currently are not paid specifically for such work, and Ms Hajdu in her comments on X voiced surprise at what she called allegations of unpaid work at the airline, which for months has been in on-and-off contract talks that prominently included the ground pay demands.

“I’ve ordered a probe into the allegation of unpaid work in the airline sector,” said Ms Hajdu, who this weekend kicked off the effort to force binding arbitration that would end the strike, contrary to union wishes.

A leader of the union on strike against Air Canada said on Aug 18 that he would risk jail time rather than allow cabin crews to be forced back to work by a federal labor board.

Air Canada CEO Rousseau said he was amazed the union was not following the law, adding the strike was illegal and harming the airline’s customers and brand.

“At this point in time, the union’s proposals are much higher than the 40 per cent. And so we need to find a path to bridge that gap,” Mr Rousseau said, without suggesting what that process would be. “We’re always open to listen and have a conversation,” he said.

The Canadian Union of Public Employees (CUPE) said the strike would continue until the carrier negotiates on wages and unpaid work, even after the Canada Industrial Relations Board declared the strike unlawful.

“If it means folks like me going to jail, then so be it. If it means our union being fined, then so be it. We’re looking for a solution here,” said Mr Mark Hancock, CUPE national president, at a press conference after a deadline by the board to return to work expired with no union action to end the strike.

The union has said Air Canada’s offer accounts for 17.2 per cent higher wages over four years.

Canadian Prime Minister Mark Carney pleaded for a resolution, saying “hundreds of thousands of Canadians and visitors to our country are being disrupted by this action”.

A domestic tourism boom has helped limit the economic damage from tariffs imposed by Canada’s biggest trade partner, the United States, and Air Canada is the country’s biggest carrier.

Mr Hancock said the union has not heard from the jobs minister or Air Canada since Aug 15.

The third day of a strike by more than 10,000 flight attendants has stranded passengers and led Air Canada to suspend its third-quarter and full-year 2025 guidance, sending shares down nearly 3 per cent. The airline has earned lower profit due to fewer bookings to the United States.

The carrier normally carries 130,000 people daily and is part of the global Star Alliance of airlines.

Unpaid work

While passengers have largely expressed support for the flight attendants, some are growing weary of the uncertainty.

Ms Danna Wu, 35, said she and her husband will have no choice but to drive from Winnipeg to Vancouver if the strike persists for a visa appointment.

Although she believes Air Canada should pay its attendants more, the University of Manitoba master’s student added, “It’s not responsible to strike and leave thousands of passengers in such chaos.” The Air Canada flight attendants’ demands on unpaid work follow gains recently won by flight attendants in the United States, including at American Airlines and Alaska Airlines.

The government’s options to force an end to the strike include asking courts to enforce the order to return to work and legislation.

“The government will be very reticent to be too heavy-handed because in Canada, the Supreme Court has ruled that governments have to be very careful when they take away the right to strike, even for public sector workers that may be deemed essential,” said Ms Dionne Pohler, a professor of dispute resolution at Cornell University.

The previous Canadian government intervened in 2024 to head off rail and dock strikes that threatened to cripple the economy, but it is highly unusual for a union to defy a CIRB order.

“If you’re going to fine us or you’re going to try and take us on financially, then you can take us to court, and we can see where that plays out,” said Mr Hancock. REUTERS