Air Canada labor deal could reshape pay for North American crews

(CANADA) Air Canada’s new labor deal, ratified on July 18, 2025, sets a high bar for cabin crew pay and working conditions across North America and may drive a wave of matching demands from unions at U.S. and Canadian rivals. The 5-year agreement (Aug. 1, 2025–July 31, 2030) covers about 10,500 flight attendants and cabin crew and delivers an immediate 9% base pay raise, followed by scheduled increases through 2029 that bring the cumulative rise to about 23.5%.

The contract also adds stronger rest rules, higher per diems, richer overtime, profit sharing, and pension gains, alongside a no-layoff guarantee for the full term, except in cases of force majeure.

Mark Galardo, Air Canada’s executive vice president, said the deal “recognizes the vital role our flight attendants play and ensures Air Canada remains competitive in attracting and retaining top talent.” CUPE Air Canada Component President Wesley Lesosky called the contract “historic,” adding, “This sets a new standard for the industry.” Transport Canada said it is monitoring the agreement’s rollout and its possible impact on the broader aviation sector. The regulator’s official resources are available at https://tc.canada.ca.

Key terms of the agreement

Air Canada and the Air Canada Component of CUPE structured the contract with layered pay and duty protections that unions in the United States have already begun to cite at the bargaining table. Core provisions include:

• Wage increases: 9% on Aug. 1, 2025; then 4% (2026), 3.5% (2027), 3% (2028), and 3% (2029) for a cumulative ~23.5%.
• Retroactive pay: Back pay for hours worked since the prior contract ended on July 31, 2025.
• Minimum duty pay: A new 5-hour guarantee per duty period, up from 4 hours.
• Per diems: 12% higher on international trips and 8% higher domestically.
• Rest rules: Minimum 12-hour rest between duty periods, up from 10 hours.
• Overtime premiums: A 15% increase for hours over 80 per pay period.
• Profit sharing: New formula tied to Air Canada’s annual EBITDAR with a floor for payouts.
• Pensions: Employer contributions to the defined benefit plan rise by 1.5 percentage points.
• Job security: A no involuntary furloughs/layoffs clause for the life of the agreement, barring force majeure.
• Workplace standards: Updated anti-discrimination language and support for gender-neutral uniforms.
• Health benefits: Expanded mental health coverage and higher dental and vision maximums.

Air Canada says the package balances pay, safety, and staffing needs as demand stays strong after the pandemic slump. The enhanced 12-hour rest is designed to aid safety and fatigue management. The 5-hour minimum duty pay and stronger overtime aim to better value time on duty, especially on irregular operations that often strain schedules.

Industry ripple effects

As of August 2025, analysts view this as the top-value cabin crew contract in North America. That status matters because U.S. unions—at United, Delta, and American—have argued that flight attendants fell behind pilots, who secured record pay in 2023–2024.

According to analysis by VisaVerge.com, the Air Canada deal is already shaping bargaining agendas across the continent, with unions pushing for comparable or higher packages.

“We will not settle for less than what Air Canada crews have achieved. This is the new floor, not the ceiling.” — Sara Nelson, president of the Association of Flight Attendants‑CWA

Union leaders in the United States have been blunt in public statements. Industry consultants say the Air Canada framework may reduce the risk of strikes and slowdowns for the carrier by aligning pay and rest with market expectations, even as it lifts labor costs.

Cost pressure is a live concern. Airlines may try to offset higher wage bills through fares, fees, or cost controls elsewhere. If U.S. talks stall, the risk of strike votes or mediation grows. The source material notes several U.S. unions have either authorized strike votes or are in mediation, and that votes at United and American were slated for September 2025.

One U.S. airline executive, speaking anonymously, called the Air Canada contract “a game-changer,” adding, “We’re preparing for tough negotiations.”

For travelers, Air Canada’s no-layoff clause and richer terms could stabilize operations by shoring up morale and staffing. But if U.S. carriers hit impasses, passengers there could see threats of service disruptions.

Airlines are also reviewing scheduling practices in light of the 12-hour rest rule, which could affect crew pairings and reserve usage.

Regulators are watching. Transport Canada said it is tracking the agreement’s implementation and any market effects. In the United States, the Department of Transportation and labor mediators are monitoring U.S. bargaining rounds as the Air Canada template gains visibility. Industry watchers forecast an average 10–15% rise in North American flight attendant wages by 2027 if similar deals spread.

Implementation and what comes next

The agreement moves in stages:

1. Retro pay processing is scheduled for completion by Sept. 15, 2025.
2. Minimum duty pay and 12-hour rest rules apply to all flights scheduled after Aug. 1, 2025.
3. Profit sharing begins with 2025 earnings, with the first checks planned for March 2026.
4. Benefit upgrades take effect Oct. 1, 2025.
5. A joint labor‑management committee will monitor compliance and resolve issues.

Context matters. The prior contract expired on July 31, 2025. Talks unfolded against stubborn inflation, a sharp travel rebound, and staffing gaps that left many crews stretched. Historically, flight attendant pay has trailed pilot wage growth in both Canada and the United States. This contract bends that curve, with Canadian terms now competing with, and in some areas leading, North American norms.

Labor experts see a turning point. Dr. Susan McAllister, an aviation labor analyst, called the deal “a watershed moment,” predicting it will anchor most major crew negotiations in 2025 and beyond.

For Air Canada, the cost is real, but executives argue that preventing unrest and keeping crews on the job is cheaper than cancellations and reputational damage.

What to watch next

• Ongoing U.S. talks at United, Delta, and American, with unions invoking Air Canada’s wage path, duty protections, and profit-sharing model.
• Whether WestJet, Alaska, and Southwest face similar pressure as competitors match duty pay floors and rest times.
• How airlines handle per diem and scheduling changes that affect longer layovers and international pairings.

For flight attendants weighing careers, the Air Canada blueprint offers a clearer pay path and steadier scheduling rules. The 5-hour duty minimum and stronger overtime help guard against unpaid time and long duty days. The improved pension contributions matter most to mid‑career and senior crew who plan to retire at the airline. Mental health coverage, dental, and vision bumps round out quality‑of‑life gains that crews often say are as important as wages.

For airlines, profit sharing tries to align pay with performance while protecting the balance sheet in weaker years. The EBITDAR‑based approach creates a floor for payouts while tying upside to financial results. If air travel remains strong, this could deliver meaningful checks from 2026 onward.

Air Canada, CUPE, and Transport Canada will keep meeting as the new rules settle in. The carrier’s leadership says the deal will help with hiring and retention at a time when experience is vital in the cabin. Unions across North America will now test how much of this template they can carry into their own contracts, and how quickly.

Whether through faster wage steps, stronger rest, or richer duty pay, the Air Canada deal gives crews concrete targets — and sets the pace for the next round of talks.