Air Canada suspends profit outlook as flight attendants defy back-to-work order

Air Canada has withdrawn its earnings forecasts after striking flight attendants refused to comply with a government-backed return-to-work order, grounding flights and intensifying pressure on Ottawa.

Air Canada on Monday suspended its third-quarter and full-year profit guidance after thousands of flight attendants defied a government order to return to work, prolonging a strike that has grounded much of the airline’s fleet.

The Canadian Union of Public Employees (CUPE), which represents 10,000 cabin crew, said it would not comply with the order and instead urged the airline to return to the bargaining table for a negotiated settlement.

The labour board’s decision, issued on Saturday following a request by Prime Minister Mark Carney’s government, mandated binding arbitration to resolve the dispute. Air Canada had planned to resume operations on Sunday evening but now expects delays until at least Monday night.

In a statement, the airline said the union was “illegally defying” the ruling from the Canada Industrial Relations Board (CIRB), while CUPE argued the directive was “unconstitutional” and undermined the right to strike.

The government has several options, including seeking court enforcement of the order, requesting an expedited hearing, or introducing back-to-work legislation—though parliament is not due to reconvene until 15 September.

“The government will be very reticent to be too heavy-handed,” said Dionne Pohler, a professor at Cornell University’s School of Industrial and Labour Relations, citing a Supreme Court precedent requiring careful justification for overriding strike rights.

At Toronto Pearson International Airport, passengers faced widespread confusion. Francesca Tondini, 50, said she supported the strike despite not knowing when she could return to Italy: “They are right,” she said, pointing to the picketing staff.

The strike centres on how flight attendants are compensated. While they are currently paid only when aircraft are in motion, CUPE is seeking payment for ground duties such as boarding—similar to recent agreements at American Airlines and Alaska Airlines, which now compensate U.S. flight attendants during passenger boarding.

The standoff is unusual in Canada, where direct defiance of a CIRB order is rare. The previous government under Justin Trudeau intervened in 2024 to prevent rail and dock strikes, but did not face outright non-compliance from unions.

Air Canada is a member of the global Star Alliance and typically carries about 130,000 passengers daily.

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