Why Air Canada has suspended profit forecasts for entire year
What's the story
Air Canada has suspended its profit forecasts for the third quarter and the entire year. The decision comes as result of a strike by flight attendants, which has left hundreds of planes grounded. Despite a government-backed order to return to work, the union has refused and is demanding that the airline return to negotiations.
Operational impact
Air Canada planned to resume operations yesterday
Air Canada, a major player in the global Star Alliance of airlines, had planned to resume operations on Sunday evening. This was after a labor relations board ordered the union to return to work and start binding arbitration. However, the union refused, creating an unprecedented standoff with the Canadian government that requested the back-to-work order.
Strike demands
CUPE demands better wages and compensation for ground work
The Canadian Union of Public Employees (CUPE), which represents 10,000 Air Canada cabin crew members, is demanding better wages and compensation for ground work. Currently, the attendants are only paid when planes are in motion. The union has invited Air Canada back to the negotiations, calling the order to end its strike unconstitutional.
Resolution strategies
Canadian government considers options to end strike
The Canadian government is considering several options to end the strike. These include seeking court enforcement of the order to return to work and an expedited hearing. The minority government could also attempt to pass legislation with political support and approval in both houses of parliament, which are currently on break until September 15.
Industry shift
Dispute centers around how airlines compensate flight attendants
The dispute between cabin crews and Air Canada centers around how airlines compensate flight attendants. Traditionally, most airlines have only paid them when planes are in motion. However, new labor agreements at American Airlines and Alaska Airlines now require carriers to start paying flight attendants during passenger boarding. This trend is also being sought by United Airlines's cabin crew.