Air Canada began gradually restoring flights on August 19, 2025, after reaching a mediated tentative agreement with the union representing more than 10,000 flight attendants at Air Canada and Air Canada Rouge. The deal ended a four-day labor disruption that had grounded the two airlines and disrupted travel for hundreds of thousands of customers.
The agreement brought the immediate strike to an end, but it did not mean Air Canada's schedule returned to normal overnight. The airline warned at the time that rebuilding its network could take a week or more because aircraft and crews had been displaced across the system.
Why Air Canada Flights Were Grounded
The labor dispute involved Air Canada and the Air Canada component of the Canadian Union of Public Employees (CUPE). The previous collective agreement had expired on March 31, 2025, and negotiations focused on several issues, including wages, scheduling, benefits and compensation for duties performed while aircraft were on the ground.
The strike began on August 16, grounding Air Canada and Air Canada Rouge operations. Air Canada Express services operated by Jazz and PAL were not part of the same labor disruption and continued operating.
The federal government intervened during the dispute, and the Canada Industrial Relations Board directed the flight attendants to return to work and imposed binding arbitration. CUPE continued the strike while challenging the intervention, creating an unusually tense standoff between the union, the airline and the federal government.
Negotiations nevertheless resumed with mediator William Kaplan. On August 19, Air Canada announced that the parties had reached a mediated settlement and that flight attendants would return to work, allowing operations to restart.
How Many Passengers Were Affected?
Air Canada estimated that approximately 500,000 customers would be disrupted by the shutdown. Before the restart, the airline had progressively cancelled flights as the labor dispute developed, eventually suspending Air Canada and Air Canada Rouge operations entirely.
For passengers whose flights had been cancelled, Air Canada said it was offering options that included refunds, future travel credits and, where possible, rebooking on other airlines.
Restoring a major airline after several days of cancellations is more complicated than simply reopening bookings. Aircraft may be positioned at the wrong airports, crews can be displaced or reach duty-time limits, and connecting schedules have to be rebuilt. That is why Air Canada cautioned on August 19 that full restoration of its network could require a week or longer.
The Dispute Over Ground Work and Flight Attendant Pay
One of the central issues in the negotiations was how flight attendants were compensated for work performed before and after a flight.
CUPE argued that duties such as boarding passengers, conducting safety checks, assisting travelers and preparing the cabin involved significant working time that was not separately compensated under the industry's traditional pay structure. Flight attendant compensation has commonly been based primarily on flight or "block" time, supplemented by other contractual guarantees and allowances rather than an hourly payment for every minute spent on duty.
When announcing the tentative agreement, CUPE declared that "Unpaid work is over" and described the agreement as a major change for its members and the broader airline industry.
The agreement introduced specific compensation for work performed on the ground. Air Canada later said that ground-pay provisions took effect from August 19, 2025, independently of the unresolved wage issue.
Why the 38% Pay Figure Was Contested
Claims about the size of Air Canada's compensation proposal became a major point of disagreement during the dispute.
Before the strike, Air Canada said its proposal represented a 38% increase in total compensation over four years. That figure included more than changes to base hourly wages, such as the proposed ground-pay formula and other compensation improvements.
CUPE disputed the way that figure was presented. Reuters reported during the strike that the union said the proposed hourly wage increase for more senior flight attendants amounted to approximately 17.2% over four years, making the distinction between base wages and broader total compensation important.
The final August agreement also addressed pensions, benefits, working conditions and scheduling, in addition to introducing compensation for ground duties.
Government Probe Into Airline Ground Work
The dispute also triggered a broader federal examination of flight attendant compensation.
On August 18, 2025, Jobs and Families Minister Patty Hajdu announced a government probe into compensation practices in the airline sector. The review focused on whether flight attendants were being paid in a manner that met minimum requirements under Part III of the Canada Labour Code.
The government subsequently consulted airline employers, unions and other industry organizations. A report published in February 2026 did not identify evidence of a sector-wide failure to meet the Canada Labour Code's wage requirements, but it found areas where compensation practices warranted closer examination. The government said additional compliance work and industry review would follow.
The Tentative Agreement Was Later Rejected
The August 19 agreement ended the strike, but an important later development changed the longer-term outcome: Air Canada flight attendants did not ultimately ratify the entire tentative agreement.
CUPE members voted on the agreement between late August and early September 2025. On September 6, the union announced that members had rejected it. Canadian government records later reported that 99.1% of voting members opposed ratification.
However, that rejection did not trigger another strike. Air Canada and CUPE had already agreed that if members rejected the agreement, the outstanding wage issue would move to mediation and, if necessary, arbitration. Other negotiated provisions, including ground pay and improvements involving benefits, pensions and working conditions, were not reopened in the same way.
The parties subsequently moved the wage dispute directly to arbitration. As a result, Air Canada flights continued operating while the remaining compensation issue was decided.
What Ultimately Happened to the Contract?
The labor dispute was finally resolved in 2026. According to Air Canada's subsequent contract update, a federal arbitrator issued the wage decision in February 2026, completing the new four-year collective agreement.
The arbitrator largely upheld the wage structure contained in the tentative agreement, while increasing first-year wage rates for Air Canada Rouge flight attendants by an additional percentage point. Wage increases were made retroactive to April 1, 2025.
The finalized agreement therefore preserved the most significant structural change that emerged from the 2025 dispute: separate compensation for qualifying work performed on the ground, alongside updated wages, pensions, benefits and scheduling provisions.
What the 2025 Strike Changed
The immediate story in August 2025 was the restoration of Air Canada flights after four days of disruption. In the longer term, however, the dispute became part of a broader debate over how Canadian flight attendants are compensated for the full range of duties they perform.
The strike ended on August 19 and Air Canada's network was progressively restored. Although members later rejected the wage portion of the tentative settlement, the dispute did not return to a shutdown. Arbitration eventually settled the remaining wage question and finalized the contract in 2026.
For travelers, the episode also demonstrated why recovering from an airline-wide shutdown can continue well after a strike officially ends: aircraft, crews and passenger itineraries all have to be repositioned and rebuilt before a large network can operate normally again.
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