Air Canada arbitration sets flight attendant raises, easing strike risk through 2029

Air Canada’s wage dispute with its flight attendants is now officially settled through binding arbitration. Federal arbitrator Paula Knopf issued a wage award on February 17, 2026. The decision closes the last major unresolved item left over from the labour fight that erupted into a short strike in August 2025. Air Canada says the award finalizes a new four-year collective agreement that runs until March 2029.

The pay deal

The award keeps the main wage pattern Air Canada put forward in arbitration: a first-year increase of up to 12 percent for mainline flight attendants (with smaller first-year increases for more senior steps on the wage grid), and 13 percent for flight attendants at Air Canada Rouge. After that, raises are scheduled across the contract: 3 percent in year two, 2.5 percent in year three, and 2.75 percent in year four. The arbitrator said the wage rates met Canadian industry norms, while the union argued they still did not fully reflect cost-of-living pressures in expensive bases like Toronto.

Why this matters to travelers and the travel industry

For passengers and travel businesses, the biggest change is predictability. The August 2025 strike halted Air Canada flights at the height of summer demand, affecting more than 130,000 people per day and causing large-scale cancellations and rebooking chaos. With wages now set through 2029, Air Canada can plan schedules, staffing, and seasonal capacity with a lower risk of another sudden stoppage. The flip side is cost: higher labour expense can add pressure on airlines to protect margins, which sometimes shows up as tighter capacity choices or firmer pricing.

The “ground pay” shift that could echo beyond Air Canada

This dispute was not only about wage rates. Flight attendants have long pushed to be paid for more of the work done on the ground—boarding, safety checks, and turnaround tasks. Reuters highlighted “ground pay” as a key gain and noted the issue has become a broader North American union priority. Air Canada says it started ‘ground pay’ on August 19, 2025, so flight attendants now get paid for a set amount of time spent on pre-departure and post-arrival duties. That pay is a percentage of their hourly wage, and it increases over the life of the contract. That structure matters because other airline unions can point to it in future bargaining.

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