“Air Canada, one of North America’s largest airlines, may ground all operations due to a threatened strike by its pilots. In such an event, 670 flights which carry hundreds of thousands of travelers each day may be brought to the ground. Compensation for pilots is the bottom-line issue, as pilots of Air Canada are demanding wages considerably higher than what they’re being paid now to match those offered by U.S. airlines.

Below, we give the details of the situation, what the strike threat is for, how it may affect its travelers, and what could be in the future with the airline if the dispute is not quickly resolved.”

Why Are Air Canada Pilots Threatening to Strike?

The threat dates from the wage difference that exists between Air Canada pilots and those from the United States. Air Canada has offered a 30 percent increment over three years, but this offer was turned down by the pilots, who claimed it was not good enough. As a matter of fact, many say this increase does not close the wage gap that exists between Canadian and U.S. pilots.

First officers at Air Canada are said to make as little as $75,000 annually, while pilots that fly comparable routes in the States using comparable aircraft make upwards of $300,000. Even senior captains with Air Canada who bring in over $300,000 come in significantly lower compared to their American counterparts doing the same job, who can receive upwards of 60% more.”

How Did We Get Here? The Airline Industry Post-Pandemic

1. Pilot Shortage in North America

Before going into the details of the strike, it is important to consider the general outlook of the industry. The COVID-19 pandemic hit the airline industry terribly. Layoffs and early retirements among pilots were high. Many airlines parked their planes and trimmed their staff due to fallen travel demand.

But the industry bounced back fast enough. In 2022, air travel neared pre-pandemic levels, with airlines struggling to cope with a shortage of pilots caused by their earlier retirements and layoffs. The labor market went into overdrive, sending salaries for US pilots sky-high as airlines fought to hold onto qualified employees and hire more.

With so few pilots, U.S. airlines had to offer wages that significantly outpaced supply. That permitted U.S. pilots to capitalize on new leverage in negotiating higher salaries and leaving their Canadian counterparts, such as those flying for Air Canada, feeling underpaid.

2. Air Canada’s Challenges

It is no different in Canada, as the airlines have not been in a position to meet the demand for qualified pilots. Air Canada reduced operations in St. John, Calgary, and Penton due to the shortage of pilots. The management are aware that if they fail to offer them decent salaries their risk of losing even more pilots to American airlines becomes great. In 2022 alone, three times more Canadian pilots applied for American commercial licences compared to the previous year. Air Canada estimates that close to 800 of its pilots could leave for better-paying opportunities in the U.S. if changes are not made soon.”

Potential Strike Impact on Travelers

The result of such a strike by Air Canada pilots would be disastrous for fliers. It is estimated that about 670 flights are at risk of being cancelled daily and could leave over 100,000 passengers stranded daily. Many such flights would either be delayed, rerouted, or canceled and would mean chaos at various airports where frenetic changes in travel plans are made by travelers.

This could be the scenario if the strike gets underway:

• Flight Cancellation: Hundreds of flights will be canceled, thus passengers will be stranded across the U.S., Canada, and internationally.
• Travel Disruptions: Business and vacation travelers traveling with Air Canada could be in for huge delays and lost connections.
• Price Increases: With cancellations in flights, people would look towards other airlines for travel, which means the demand will shoot up, increasing the price of the tickets accordingly.
• Long-Term Effects: Even after the strike has ended, Air Canada warned that it would take at least a week to return operations to normal, so the disruptions could last well beyond the initial strike period.”

Air Canada’s Offer vs. the Pilots’ Demands

Air Canada appears to have adopted the position that 30 percent over three years is an offer they could live with. Statements by Air Canada’s chief executive officers suggested that such an increase would make the pilots of Air Canada the highest-paid commercial pilots in Canada. The union said even this increase would leave their wages far below U.S. industry standards.

The pilots union has blamed ‘corporate greed’ on the part of Air Canada, citing that as pilots have seen only modest increases in wages, executive compensation has doubled since 2015. Indeed, pilots believe they should be compensated fairly, especially considering Air Canada’s record profits in recent years.”

What Could Happen Next?

As tensions rise, several scenarios can ensue:

1. Settlement: This would be a last-minute agreement between Air Canada and the pilots’ union that could avert the strike. The two parties seem willing to sit down for talks, although it would be tough to find a middle ground at this juncture since both parties are so far apart on what they want as far as wages go.
2. Government Intervention: If negotiations completely break down, the Canadian government could intervene. The government has intervened in similar disputes in the past, as evidenced by a recent railway lockout. If the matter worsens, binding arbitration could be imposed to avoid a strike altogether.
3. Full Strike: If there is no compromise, then the labor union can declare a 72-hour strike notice to Air Canada, thus shutting down operations. The pilots have plenty of bargaining chips, knowing that when they do not report to duty, the airline comes to a stop, but passengers would feel the pain of severe travel disruptions.

Air Canada Critical Moment

This looming strike of Air Canada pilots is not a labor dispute but reflects broader trends in the industry and some new challenges that airlines have been facing in the post-pandemic era. The airline has offered a raise of 30% in pay, but according to the pilots, this is quite inadequate in view of the huge pay disparity that exists between Canadian and US pilots. With 670 flights a day in jeopardy of being grounded along with thousands of travelers potentially affected, the pressure is on both sides to reach a deal.

A solution has to be reached either through negotiation or through government intervention as soon as possible to prevent a complete shutdown of the operations of Air Canada. Till such time, passengers and airline staff remain in a limbo, waiting for the unfolding of this critical situation.