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An Air Canada plane is seen at Pearson Airport in Toronto on July 24. The airline is preparing for a potential shutdown of most operations next week as contract talks with its pilots' union near an impasse.Christopher Katsarov/The Canadian Press

Air Canada says it is preparing to wind down operations ahead of an “increasingly likely” strike or lockout as contract talks with its pilots union are nearing an impasse over “inflexible” wage demands.

The Montreal-based carrier and the Air Line Pilots Association (ALPA), which represents 5,200 pilots at Air Canada and Rouge, have been in negotiations for more than a year. The two sides are in a legal strike or lockout position on Wednesday, Sept. 18, provided they issue 72-hours notice.

Worried about an Air Canada pilot strike? Be careful about cancelling or rebooking your flights

The labour dispute could disrupt travel plans for thousands of travellers during September and perhaps beyond. Here’s what you need to know, as both sides continue to negotiate ahead of the deadline.

When could a potential Air Canada pilots strike begin?

Air Canada said that a 72-hour strike or lockout notice could be issued as early as Sunday, Sept. 15. The airline would begin winding down operations, a process that would take place gradually over three days.

Flights across its system would be cancelled over the three days, with a total shutdown as early as 12:01 a.m. ET on Sept. 18. Aircraft groundings for some foreign travel and sun destinations will begin as early as Sept. 13, to avoid leaving customers, crew and planes stranded.

The union voted overwhelmingly in August to approve a strike mandate. Air Canada and ALPA entered into a mandated three-week cooling-off period on Aug. 27, during which the union cannot go on strike.

Which airlines will be affected?

Air Canada and its low-cost subsidiary, Air Canada Rouge, will be affected if a strike occurs.

Air Canada Express carriers Jazz and PAL Airlines are not involved in the negotiations with ALPA, and their flights are operating normally. The airline said, however, that these regional partners only carry about 20 per cent of Air Canada’s daily customers, many of whom ultimately connect on Air Canada flights.

What will happen to my flight if Air Canada’s pilots go on strike?

Currently, operations have not been affected and Air Canada flights are operating as scheduled.

The airline implemented a goodwill policy as of Aug. 27 that allows passengers to change a flight for free, depending on booking and travel dates. For example, customers that are scheduled to travel between Sept. 15 and Sept. 23 are able to change their flight, free of charge, to another date. Passengers can choose to pre-emptively cancel a flight – if the travel dates are reflected in the policy – but a cancellation fee may apply.

Air Canada has said that it has been arranging with other carriers to secure space for customers in the event that a flight is cancelled. Customers will be notified if another airline is available, but seats are expected to be “very limited.”

Will my cancelled Air Canada flight be refunded?

All customers whose flights are cancelled by Air Canada will be notified and eligible for a full refund or credits, which can be obtained online on its website or through the Air Canada mobile app.

The airline says, however, that customers will not be entitled to compensation for inconvenience, lodging or food under the federal rules because labour disruptions are outside its control.

How many flights and passengers will be affected?

Air Canada and Air Canada Rouge operate nearly 670 international and domestic flights daily, according to the airline’s website. A work stoppage is estimated to affect about 110,000 passengers daily and cause widespread disruptions.

How could a potential Air Canada strike affect other airlines and passengers?

Disruptions will spill over into other countries and affect other airlines and their passengers. Air Canada is a member of the Star Alliance airline group, in which carriers sell seats on other members’ aircraft. For instance, passengers travelling to Colorado from Munich might fly with Air Canada or Lufthansa to Toronto and transfer to a United Airlines plane for the final leg. This means a strike, lockout or cancellation at Air Canada will begin at Toronto, Vancouver or any of its other domestic hubs and cascade through the global network.

Chicago-based United Airlines has warned its customers their travel to or from the nine major Canadian airports might be disrupted between Sept. 15 and 23. The airline is waiving the fees to change or cancel flights. Star Alliance members Lufthansa and TAP Air Portugal did not respond to e-mails on Monday.

How long could disruptions at Air Canada last?

If a work stoppage occurs, Air Canada says it will make every effort to resume normal operations as quickly as possible once a settlement with its pilots is reached. But it could take seven to 10 days to restore the system to full capacity in the wake of a complete shutdown.

The airline says it will expand its existing goodwill policy around changes and cancellations beyond Sept. 23 if necessary.

What is the union representing Air Canada pilots asking for?

The union has said it is seeking wage increases that will bring its members in line with their North American counterparts, better retirement benefits and quality-of-life improvements.

The Air Canada pilots last year completed a 10-year contact that provided yearly raises of about 2 per cent. Meanwhile, their counterparts at other airlines last year saw large pay increases amid a pilot shortage. Crews at WestJet Airlines last year reached a deal for 24-per-cent raises over four years; Delta Airlines pilots will see their wages rise by 34 per cent over the same period.

In 2023, Air Canada captains were paid between $215,000 and $352,000, the airline said, depending on seniority, the plane flown and other variables.

With reports from Reuters and The Canadian Press.

What are your questions about a potential Air Canada pilots strike?

The clock is ticking on a potential Air Canada pilots strike. Do you have questions about how a potential strike would affect your travel plans or upcoming flights? Have you experienced any issues rebooking a flight so far? Do you want to know if you're entitled to a refund or any compensation? The Globe wants to hear your questions. Submit below, or send us an email to audience@globeandmail.com.

The information from this form will only be used for journalistic purposes, though not all responses will necessarily be published. The Globe and Mail may contact you if someone would like to interview you for a story.

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