Air Canada CEO defends offer as strike defies order

Published on Aug 18, 2025, 5:21 pm CDT

6 min read

Air Canada's chief executive, Michael Rousseau, defended the carrier's 38 percent compensation package on August 18, 2025, while acknowledging a "big gap" with the union's wage demands. The Canadian Union of Public Employees, which represents more than 10,000 flight attendants, is refusing a Canada Industrial Relations Board return-to-work directive, prolonging a shutdown that has stranded hundreds of thousands of travelers. The company suspended its financial guidance as the standoff entered a third day, and neither side outlined a concrete path back to negotiations.

Key Points

Why it matters: Canada's largest carrier remains largely grounded during peak tourist season, disrupting hundreds of thousands of trips.
Travel impact: Mainline Air Canada and Air Canada Rouge operations are suspended while the flight attendant strike continues.
What's next: Courts, fines, or legislation are on the table if CUPE keeps defying the CIRB return-to-work order.
CEO position: Rousseau says the 38 percent package is fair, but concedes a "big gap" with union demands.
Union position: CUPE says the offer equals only 17.2 percent in wages over four years, and demands pay for boarding time.
Government stance: Prime Minister Mark Carney urged both sides to quickly reach a deal.

Snapshot

Rousseau told reporters the airline is "amazed" the union is ignoring a CIRB directive to resume flying, and said he is open to conversations without offering a process to restart talks. CUPE counters that Air Canada's offer inflates "total compensation," while actual wages would rise only 17.2 percent over four years, and that ground duties remain underpaid. The federal government pushed binding arbitration over the weekend, but the union rejected the approach and continued picketing. Air Canada suspended third-quarter and full-year guidance amid the shutdown, which has affected roughly 130,000 daily passengers. Our earlier coverage tracks the escalation from strike threat to shutdown, including Air Canada strike: weekend shutdown risk grows and Air Canada strike: Ottawa orders binding arbitration.

Background

The dispute centers on wages and compensation for work when aircraft are not moving, including boarding, deplaning, and pre-departure safety duties. North American flight attendants traditionally earn pay only once the aircraft door is closed, a model unions in Canada and the United States have recently challenged. Air Canada says its latest package lifts "total compensation" by 38 percent over four years and includes partial pay for currently unpaid ground duties. CUPE says wages alone would increase 17.2 percent, leaving members below market rates and still uncompensated for significant portions of their shifts. The government's move toward binding arbitration, meant to end the shutdown, triggered CUPE's defiance of the CIRB order and deepened the stalemate.

Latest Developments

CUPE defies CIRB order, legal risks rise

The CIRB declared the flight attendant strike unlawful and ordered members back to work. CUPE's national leadership responded that the strike would continue until Air Canada negotiates on wages and ground-duty pay, even if the stance risks fines or jail for union leaders. Legal scholars note the Canada Labour Code allows the board and courts to impose sanctions on unions and individuals who defy orders. Practically, the defiance keeps the network shutdown in place, prolonging chaos for travelers, tour operators, and partner carriers that rely on Air Canada's domestic and transborder feed.

Government weighs options as binding arbitration stalls

Prime Minister Mark Carney urged a quick resolution, emphasizing the disruption to Canadians and inbound visitors. Ottawa's near-term tools include court enforcement of the CIRB order and expedited hearings. Back-to-work legislation remains possible, but Parliament is on break until September 15, and the government has been cautious given court rulings that protect the right to strike. Without voluntary talks, the binding arbitration pathway remains blocked by CUPE's refusal, keeping pressure on all parties through continued cancellations.

What Air Canada is offering, and why the math differs

Air Canada frames its proposal as a 38 percent "total compensation" increase over four years, including wages, premiums, and partial pay for ground time. CUPE isolates the wage component, stating it totals 17.2 percent over the term, which it argues lags inflation and current Canadian industry scales. The union also points to recent U.S. contracts that start the pay clock during boarding, a model it wants mirrored. The accounting differences explain the public stalemate, and without a shared framework for ground-duty pay, the gap remains wide.

Analysis

This confrontation blends an economic dispute with a governance test. On the economics, labor markets for cabin crew tightened during the recovery, and U.S. settlements created new anchors around boarding pay and front-loaded raises. Air Canada's "total compensation" framing, standard in negotiations, clashes with CUPE's focus on base wages and uncompensated ground time. Until both sides converge on a transparent, apples-to-apples model that quantifies ground-duty pay and aligns increases with market comparables, public numbers will keep talking past each other. On governance, CUPE's defiance of the CIRB order is unusual and raises stakes for Ottawa, which must balance mobility, economic stability, and Charter-protected labor rights. Heavy-handed intervention risks legal and political blowback. For travelers, the immediate reality is uncertainty, limited reaccommodation, and higher costs rippling through summer itineraries. A face-saving glide path likely involves a quick, time-boxed return to mediated talks, with a narrowly tailored boarding-pay formula to bridge the wage optics and unlock a framework compatible with binding arbitration.

Final Thoughts

For travelers, plan for rolling cancellations, thin reaccommodation options, and elevated fares on alternatives while this flight attendant strike continues. Monitor your bookings, consider flexible ground transport for regional trips, and avoid nonessential connections that rely on Air Canada's network until a credible timetable to resume flying emerges. A settlement that deals squarely with boarding pay, and clarifies year-one wage gains, is the most direct route to end the Air Canada strike.