Toronto, 17 August

Air Canada said it plans to resume flights on Sunday after the Canadian government intervened and forced the airline and its striking flight attendants back to work and into arbitration.

The strike stranded more than 1,00,000 travellers around the world during the peak summer travel season.

The country's largest airline said in a release that the first flights will resume Sunday evening but that it will take several days before its operations return to normal. It said some flights will be cancelled over the next seven to 10 days until the schedule is stabilised.

Less than 12 hours after workers walked off the job, Federal Jobs Minister Patty Hajdu ordered the 10,000 flight attendants back to work, saying now is not the time to take risks with the economy and noting the unprecedented tariffs the US has imposed on Canada. Hajdu referred the work stoppage to the Canada Industrial Relations Board.

The airline said Sunday the Canada Industrial Relations Board has extended the term of the existing collective agreement until a new one is determined by the arbitrator.

The shutdown of Canada's largest airline early Saturday was impacting about 1,30,000 people a day. Air Canada operates around 700 flights per day.

According to numbers from aviation analytics provider Cirium, Air Canada had cancelled a total of 671 flights by Saturday afternoon — following 199 on Friday. And another 96 flights scheduled for Sunday were already suspended.

The bitter contract fight escalated Friday as the union turned down Air Canada's prior request to enter into government-directed arbitration, which allows a third-party mediator to decide the terms of a new contract.

Flight attendants walked off the job around 1 am EDT on Saturday. Around the same time, Air Canada said it would begin locking flight attendants out of airports.

Last year, the government forced the country's two major railroads into arbitration with their labour union during a work stoppage. The union for the rail workers is suing, arguing the government is removing a union's leverage in negotiations.

The Business Council of Canada had urged the government to impose binding arbitration in this case, too. And the Canadian Chamber of Commerce welcomed the intervention.

Hajdu maintained that her Liberal government is not anti-union, saying it is clear the two sides are at an impasse.

Passengers whose flights are impacted will be eligible to request a full refund on the airline's website or mobile app, according to Air Canada.

The airline said it would also offer alternative travel options through other Canadian and foreign airlines when possible. Still, it warned that it could not guarantee immediate rebooking because flights on other airlines are already full “due to the summer travel peak.”

Air Canada and the Canadian Union of Public Employees have been in contract talks for about eight months, but they have yet to reach a tentative deal.

Both sides have said they remain far apart on the issue of pay and the unpaid work flight attendants do when planes aren't in the air.

The airline's latest offer included a 38 per cent increase in total compensation, including benefits and pensions, over four years, that it said “would have made our flight attendants the best compensated in Canada.”

But the union pushed back, saying the proposed 8 per cent raise in the first year didn't go far enough because of inflation.