What to know as Air Canada grounds flights and attendants strike

As Air Canadas flight attendants began their strike Saturday, the airline said it has "suspended all operations" while the labour dispute unfolds.

The attendants gave a 72-hour strike notice earlier this week, after contract talks reached an impasse.

Their union said the company was not addressing key issues such as wages and unpaid work, and the strike took effect shortly after midnight on Saturday.

Soon afterwards, the carrier began delaying and cancelling some flights. On Friday, it expected to scrap 500 flights, affecting 100,000 passengers.

With the strike in effect, the airline announced it would halt flights on its Air Canada and Air Canada Rouge service.

Now travellers are scrambling as Canadas largest airline shuts down during the height of summer season, and the government is pleading with both sides to come to an agreement. Heres what to know.

The airline, which operates in 64 countries and has a fleet of 259 aircraft, warned that a "complete cessation of flying" would begin on Saturday, if the labour issues arent resolved. Air Canada Express flights, which carry about 20% of Air Canadas daily customers, will not be affected.

Still, a shutdown could affect 130,000 daily customers, including 25,000 Canadians.

Upon receiving the strike notice, Air Canada issued its own 72-hour lock-out notice and began winding down operations, delaying and cancelling flights over those three days.

Chief Operations Officer Mark Nasr explained the airlines system was complex and not something "we can start or stop at the push of a button".

The Canadian Union of Public Employees (CUPE), representing 10,000 Air Canada attendants, has asserted that it bargained in good faith with the airline for more than eight months.

The airline said it recently offered flight attendants a 38% increase in total compensation over four years, with a 25% raise in the first year.

But the union said the offer was "below inflation, below market value, below minimum wage" and would leave flight attendants unpaid for some hours of work, including waiting at airports ahead of flights or guiding the boarding process.

They said that wages had not kept up with inflation, so that Air Canadas suggested pay increase was "in effect, a pay cut".

Almost all of the attendants - 99.7% - voted to strike earlier this month. The company, meanwhile, has asked the government to intervene.

Government representatives had facilitated some of the negotiations already, but the carrier went further and asked Canadas jobs minister, Patty Hajdu, to refer the matter for binding arbitration.

Earlier this week, Air Canada proposed having a third party step in to develop an agreement through what is called "binding arbitration", but the union rejected that.

It then asked the government to force the parties into binding arbitration, pointing to recent government interventions in rail, port and other negotiations.

In binding arbitration, an independent third party sets the terms of a contract in an agreement that is legally enforceable.

The union said in a statement on Friday that it had requested that Hajdu not intervene and, instead, allow "the parties to reach a resolution through free and fair negotiations, without undue interference".

For the flight attendants, the only answer is for both sides to come back to the table.

Should Hajdu side with the company, she would ask Canadas Industrial Relations Board to impose binding arbitration in order to protect the economy, according to Reuters, which reported that the board typically agrees to such requests, but after it has studied them for a few days.

There is pressure from other parts of Canada, as well. The Board of Trade for the Toronto region has called for a government intervention , while the province of Newfoundland and Labrador released a statement describing the impact of a strike as "catastrophic" for the tourism industry during the summer season.

Thats unclear.

When Air Canada pilots went on strike in September 1998 for 13 days, all of the carriers more than 600 daily flights were grounded, stranding passengers and costing the airline C$133m ($96m; £71m) before a negotiated deal was reached.

In recent years, the federal government has stepped in during labour disputes by Air Canada workers by blocking strikes and imposing agreements.

The union said imposing arbitration would stop the first strike by the carriers flight attendants since 1985.

Air Canada has said it will notify passengers if there is a change to the flights scheduled departure time.

As of Saturday, Air Canada was "strongly advising" passengers not to go to the airport unless they had tickets on other airlines.

Customers whose flights are cancelled will be notified and receive a full refund, the airline said. The company has also made arrangements with other Canadian and foreign carriers to provide customers alternative travel options.

If its a round trip, return flights are not automatically cancelled in case the passengers reaches the destination.

Those bookings can be cancelled with no fees.