Air Canada cabin staff go on strike, grounding hundreds of flights

Air Canada's unionized flight attendants walked off the job early on Saturday morning after contract talks with the country's largest carrier stalled, in a move that could disrupt travel plans for more than 100,000 passengers.

The union representing more than 10,000 Air Canada flight attendants confirmed the action in a social media post at around 0100 ET in the first strike by cabin crew since 1985.

Attendants are currently paid when the plane is moving and the union was seeking to also be compensated for time on the ground between flights and helping passengers board.

Montreal-based Air Canada, which is expected to respond quickly by locking out the workers, has said it anticipated canceling 500 flights by the end of Friday during the busy summer travel season. It expected around 100,000 people to be affected on Friday alone.

Flight attendants are likely on Saturday to picket at major Canadian airports, where passengers were already trying to secure new bookings earlier in the week, as the carrier gradually wound down operations.

Passenger Freddy Ramos, 24, said on Friday at Canada's largest airport in Toronto that his earlier flight was cancelled due to the labor dispute and he had been rebooked by Air Canada to a different destination.

“Probably 10 minutes prior to boarding, our gate got changed and then it was cancelled and then it was delayed and then it was cancelled again,” he said.

Air Canada and its low-cost affiliate Air Canada Rouge normally carry about 130,000 customers a day. Air Canada is also the foreign carrier with the largest number of flights to the US.

While the dispute has generated support from passengers on social media for the flight attendants, Canadian businesses reeling from a trade dispute with the United States urged the federal government to impose binding arbitration on both sides, which would end the strike.

Air Canada has asked the minority Liberal government of Prime Minister Mark Carney to order both sides into binding arbitration although the Canadian Union of Public Employees, which represents the attendants, said it opposed the move.

The Canada Labour Code gives Jobs Minister Patty Hajdu the right to ask the country's Industrial Relations Board to impose binding arbitration in the interests of protecting the economy.

Hajdu has repeatedly urged the two sides, which are not bargaining, to return to the table.

The union has said Air Canada offered to begin compensating flight attendants for some work that is now unpaid but only at 50% of their hourly rate.

The carrier had offered a 38% increase in total compensation for flight attendants over four years, with a 25% raise in the first year, which the union said was insufficient.

In a note to clients on Friday, analysts at financial services firm TD Cowen urged the carrier to "extend an olive branch to end the impasse," adding that investors are worried that any cost savings on labor are outweighed by lost earnings in the airline's most important quarter.

"We think it would be best for AC to achieve labor peace," the note said. "Not budging on negotiations risks being a Pyrrhic victory."