Attendants union says there is still time to reach an agreement, as airline warns 100,000 passengers affected by Friday.

Air Canada says it is at an impasse with its negotiations with the union representing its flight attendants and has announced that it will be pausing all its flights on Saturday morning.

Air Canada said on Thursday it expects to cancel several dozen flights by day’s end and approximately 500 flights by the end of Friday, affecting 100,0000 passengers, in advance of a planned Saturday strike by its unionised flight attendants.

The Air Canada executives were speaking at a news conference that ended abruptly due to protests by union members donning placards.

Mark Nasr, chief operations officer at Air Canada, said the complexity of the carrier’s network, which operates more than 250 aircraft on flights to more than 65 countries, requires it to start winding down service now.

A strike would hit the country’s tourism sector during the height of summer travel and poses a new test for the governing Liberal government under Prime Minister Mark Carney, which has been asked by the carrier to intervene and impose arbitration.

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

US carrier United Airlines, a code-share partner of Air Canada, said it has issued a travel waiver to help customers manage their travel plans.

Half of hourly rate for hours worked

The dispute hinges on the way airlines compensate flight attendants. Most airlines have traditionally paid attendants only when planes are in motion.

But in their latest contract negotiations, flight attendants in North America have sought compensation for hours worked, including for tasks like boarding passengers and waiting around the airport before and between flights.

The union said Air Canada had offered to begin compensating flight attendants for some unpaid work, but only at 50 percent of their hourly rate.

The airline said it had offered a 38 percent increase in total compensation for flight attendants over four years, with a 25 percent raise in the first year.

Restarting Air Canada’s operations would take a week to complete, Nasr told reporters in Toronto.

“It’s simply not the kind of system that we can start or stop at the push of a button,” he said. “So in order to have a safe and orderly wind down, we need to begin down.”

FlightAware data shows Air Canada has, thus far, cancelled only four flights as of Thursday morning.

Earlier in the day, Canadian Jobs Minister Patty Hajdu urged the country’s largest carrier and union to return to the bargaining table to reach a deal that could avert disruptions.

“I understand this dispute is causing a great deal of frustration and anxiety to Canadians who are travelling or worrying about how they will get home,” she said in a statement posted on X. “I urge both parties to put their differences aside, come back to the bargaining table and get this done now for the many travelers who are counting on you.”

A spokesperson for the Canadian Union of Public Employees, which represents the carrier’s 10,000 flight attendants, said Air Canada negotiators are not bargaining and have not responded to a proposal they made earlier this week.

“We believe the company wants the federal government to intervene and bail them out.”

CUPE has previously said it opposes binding arbitration.

Arielle Meloul-Wechsler, chief human resources officer at Air Canada, said the carrier never left the table.

“We are still available to bargain at any time on the condition that the negotiation has substance,” she said.