Air Canada joined business groups on Thursday in calling for the Canadian government to intervene to prevent a strike by the airline’s pilots that could start within days.

The nation’s flag carrier urged officials to order binding arbitration to resolve stalled contract talks between the company and its 5,200 unionized pilots, saying a potential strike would cause severe economic disruption for the country by halting air travel and delaying time-sensitive cargo shipments.

Last week, Air Canada announced contingency plans to wind down operations over three days if no deal is reached by Sunday so aircraft, passengers and crews aren’t stranded away from home.

The Canadian Chamber of Commerce, along with more than 90 industry trade associations, on Wednesday said in a letter that Labor Minister Steven MacKinnon should move quickly to avert a work stoppage as he did last month to end a dispute between freight railroads and labor. They too recommended the Liberal government impose binding arbitration if the parties fail to reach an agreement.

A strike “would significantly disrupt Canada’s supply chain. Air Canada’s cargo network is important for the import and export of critical, time-sensitive goods such as vaccines and medical supplies, agriculture and perishable food products, and parts and machinery for small and medium sized Canadian manufacturers,” the industry groups said. “For example, radioactive isotopes, which are crucial for cancer treatments, are shipped via Air Canada Cargo domestically and internationally due to their 48-hour lifespan. A disruption in this service, however short, would be devastating, as no other means of transport can meet the stringent time requirements for these products.”

MacKinnon posted on X that he met in Toronto on Thursday with Air Canada and representatives from the Air Line Pilots Association.

Air Canada said the sides have agreed on 70% of the 1,100 contract changes proposed by the Air Line Pilots Association after 100 days of meetings over 15 months. The union has rejected an offer for an “unprecedented” 30% wage increase over four years because pilots are holding out for wage levels commensurate with those at major U.S. airlines, the nation’s flag carrier said. It also has offered to improve the pilots’ defined benefit pension and health care plans, work-life balance provisions, and scheduling without seeking any concessions, according to the company.

Without an agreement by Sunday, the sides will legally be able to give 72-hour notice for initiating a strike or lockout, which could occur as early as Wednesday.

“With talks nearing an impasse and time for negotiation running out, the travel plans of hundreds of thousands of Canadians are hanging in the balance,” said CEO Michael Rousseau in a statement. “We are taking all measures to mitigate any impact, but the reality is even a short work stoppage at Air Canada could, given the complexity of our business operating on a global scale, cause prolonged disruption for customers. So, while we remain committed to reaching a negotiated settlement with ALPA, the federal government should be prepared to intervene if talks fail before any travel disruption starts.”

Air Canada operates six Boeing 767-300 converted freighter jets and carries shipments in the belly of passenger planes. The cargo division stopped accepting bookings for live animals, horses and human remains on Tuesday in anticipation of phased flight cancellations. Acceptance of other specialty cargo, such as temperature-controlled, perishable, pharmaceutical and hazardous, ends Thursday.

The airline’s fleet of 252 aircraft flies to 47 countries, including 35 widebody and freighter flights to the United States each week. In early June, Air Canada Cargo began operating a 767 freighter to Chicago O’Hare airport from Toronto three times per week. The other freighter destinations in the U.S. are Atlanta, Los Angeles and Miami.

Air Canada emphasized it is not seeking immediate government intervention but wants the government to be ready to use its powers under Canadian labor law to direct binding arbitration before a work stoppage takes effect. The government has acted in the past to end work stoppages, but only after they have begun.

“The airline believes recent government interventions in rail, port and airline labor disruptions in Canada provide a precedent. Moreover, the code is designed for use to ensure industrial peace in cases where parties reach an impasse after meaningful collective bargaining has occurred,” the company added.

The Canada Industrial Relations Board and Ministry of Labor last month forced Canadian National and Canadian Pacific Kansas City railroads to end their lockout, sending the contract dispute to binding arbitration – an outcome the railroads favored. Canada’s second-largest airline, WestJet, last summer narrowly averted a strike. Labor actions or their threat have also disrupted several Canadian ports and Canada Customs in the past year.

The government in June appointed federal mediators to help Air Canada and the pilots find a compromise, but the 60-day mediation period ended Aug. 27 without an agreement. ALPA members five days earlier authorized union leaders to call a strike if collective bargaining failed to produce results.

A union official told several news outlets that binding arbitration favors employers and should not be used.

“A work stoppage will lead to thousands of temporary layoffs for airline employees, which will negatively impact the air transportation ecosystem across the country. It will reinforce a growing perception that Canada is not a reliable trading partner,” the industry groups said in their letter.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

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