Air Canada is finalizing contingency plans to suspend most of its operations due to an impasse in talks with the Air Line Pilots Association (ALPA).

Canada's largest airline said talks between the company and the pilot union, representing more than 5,200 pilots at Air Canada and Air Canada Rouge, continue, but the parties remain far apart.

"Unless an agreement is reached, beginning on September 15, 2024, either party may issue a 72-hour strike or lock-out notice, which would trigger the carrier's three-day wind-down plan," Air Canada said on September 9.

Impact on air cargo operations

Any strike-related shutdown as pilot union talks reach a near deadlock is expected to affect cargo operations.

"Cargo operations will also be affected," the carrier said. "Each day, Air Canada Cargo carries in the belly holds of its aircraft and air freighters perishable or live commercial goods, components for manufacturers, and other time-sensitive items for Canadians."

"Already, the airline has begun limiting acceptance of some of these goods given average shipment timelines," it added.

This update comes as Air Canada Cargo said a few days earlier that operations are not currently affected by the ALPA labour negotiations.

"We understand that recent news updates regarding labour negotiations with the ALPA may cause concerns about shipping with Air Canada Cargo. Rest assured, our operations are currently not affected, and flights are operating as scheduled," the freight carrier said on September 4.

However, it noted then that to avoid any disruption during the shipment process, it would implement new acceptance dates for specific commodities, including animals and speciality cargo, among others.

"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," said Michael Rousseau, president and chief executive officer of Air Canada.

Air Canada noted that the chaos caused by abrupt airline shutdowns prompted it to draw a plan amid an "increasingly likely work stoppage."

"This includes the extremely difficult decision to begin an orderly shutdown of Air Canada and Air Canada Rouge once a 72-hour strike or lock-out notice is given, possibly as early as this Sunday," Rousseau said, noting that a managed shutdown is the only responsible course available to the airline.

Under the plan announced to potentially suspend flying, an orderly wind-down of operations would begin once a 72-hour strike or lock-out notice is issued, which can occur any time after 00:01 EDT on Sunday, September 15.

Flights throughout the system would be progressively cancelled over three days, with a complete shutdown as early as 00:01 EDT on Wednesday, September 18.

Air Canada said some activities would need to start as early as Friday, September 13, including the cancellation of some holiday packages and the grounding of some aircraft.

Air Canada projects that unless a settlement is achieved within the 72-hour notice period, the number of passengers affected by the suspension plan will increase progressively during the period to reach approximately 110,000 daily after 72 hours.

"A gradual shutdown is required because it is the only responsible way to manage such a labour disruption for customers and employees alike," the Canadian airline said.

Air Canada operates globally to 47 countries on six continents with a fleet of 252 aircraft, which will have to be repositioned or repatriated along with their crews.

In the event of a suspension of operations, Air Canada noted that it will make every effort to resume normal operations as quickly as possible once a settlement with ALPA is reached.

However, it is estimated that it will take 7 to 10 days after a complete shutdown to do so.

Air Canada and ALPA have been in discussions for 15 months.

"If a negotiated settlement is not reached, Air Canada would look to the government to intervene, as it has in recent labour disputes, to avoid a major disruption for Canadian travellers and other stakeholders," Air Canada added.

The carrier said Air Canada Express flights will continue to operate, as third-party carriers Jazz and PAL Airlines provide these services. However, these regional partners only carry about 20% of Air Canada's daily customers.

Air Canada and Air Canada Rouge presently operate an average of close to 670 daily flights within Canada or internationally.