Air Canada began cancelling flights on Thursday after talks with the Canadian Union of Public Employees, which represents roughly 10,000 flight attendants, reached an impasse. The carrier said it will ground several dozen long-haul services on 14 Aug, expand the cuts to about 500 flights by Friday, and halt virtually all Air Canada and Air Canada Rouge operations early on 16 Aug if no deal is reached. The 72-hour strike notice issued by CUPE on Wednesday triggered a parallel lockout notice from the airline. A full shutdown would disrupt travel for an estimated 130,000 passengers a day and could leave about 25,000 Canadians abroad seeking alternative routes. Air Canada warned that restarting its 250-aircraft network would take up to a week. Negotiations stalled after CUPE rejected the carrier’s proposal for binding third-party arbitration. Air Canada says its latest offer would raise total compensation by 38 % over four years, including a 25 % increase in the first year and partial pay for ground duties now done without compensation. The union argues the package fails to address what it calls “poverty wages” and unpaid work, and insists on a contract that members can vote on. The airline has formally asked Ottawa to impose binding interest arbitration. Jobs Minister Patty Hajdu said she is “closely monitoring” the dispute, urging both sides to stay at the table and giving the union until noon Eastern on Friday to respond to Air Canada’s request. Meanwhile, the carrier is offering refunds or rebooking on other airlines, and partners such as United Airlines have issued travel waivers for shared customers.