Air Canada Is In Trouble

Air Canada’s flight suspension continues, and the effects are now starting to hurt more than ever, with the carrier facing troubles.

In a recently published statement, the flag-carrier confirmed that its guidance for the third quarter and also full-year year-2025 operating results are being suspended.

The suspension follows their operational suspension, which now enters its almost third day with employees striking seeking better conditions, including notably pay.

This follows the Canadian Industrial Relations Board (CIRB) telling Air Canada to resume all operations under its mainline branding and Rouge division, and flight attendants would’ve needed to resume their duties at the same time, on August 17, 2025.

However, that has not panned out and despite orders, Air Canada says the Canadian Union of Public Employees (CUPE) illegally directed those it’s representing to defy the direct order and continue to strike.

As a result, Air Canada has been forced to continue a suspension of its operations and ultimately not proceed with the resumption of a limited flying schedule across both its divisions.

The airline believes it has been given no choice but to suspend guidance for the third quarter and also its upcoming full-year 2025 operating results.

Every hour the cancellations and groundings of its aircraft occur, the worse the position gets for Air Canada, the losses reaching catastrophic levels, but this is precisely the intention of the union and flight attendants who are taking a stand.

However, for Air Canada and its CEO, as of August 18, 2025, there remains a big gap between what the airline is offering its employees and what the union representing it is requesting.

A 38% boost in compensation for the striking flight attendants is what was offered, but the CEO says there is still a big gap. The union did not provide an immediate path that would return them to the negotiations, according to Reuters.

The union is seeking more than 40%; therefore, Air Canada feels it needs to find a path to bridge the gap. The airline is still open to holding conversations with parties to try and rectify the ongoing strike action.

However, the union is not standing down, standing firm instead on its demands and hoping to get what it requires, going against return to work orders and instead continuing to seek the pay increase the employees it represents feel they deserve.

Why This Is Happening At Air Canada

The strike involves Air Canada’s cabin crew members, represented by CUPE, and this collective of employees is striking because of a stalemate in ongoing attempts to secure a new contract.

As expected, like strike action which has occurred across many other airlines in recent years, the primary points of complaint include the low wages which haven’t increased at the rates required, unpaid work, pensions, working conditions and more.

The union has previously rejected other contract proposals put forward by the airline, and this has led to frustrations internally, and a vote from employees that saw a unanimous 99% of flight attendants voting in favour of a strike mandate, highlighting their dissastification at the situation.

Often viewed as a last resort, the walkout by employees is a last-ditch attempt to secure better terms and inflict damage on the business to get executives to come to the board and agree to something mutually beneficial.