(Reuters) - Negotiators for Air Canada and its flight attendants' union were racing on Sunday to reach a labor agreement, but both sides were readying for a strike that would start on Wednesday if talks fail.
The Canadian Union of Public Employees, (CUPE), said late on Sunday afternoon that it was presenting a response to Air Canada's latest offer, made earlier in the day.
But a source close to the talks said although there was progress, time was running short to avert a strike at Canada's biggest airline, which is also the world's eighth largest.
"Both sides are stepping up their preparations for strike as the reality is that if we don't have an agreement by tomorrow, all contingency plans need to be set in motion," the source said.
The union declined to comment beyond a statement earlier in the day that said negotiations were continuing. Air Canada was not immediately available for comment.
A strike by the 6,500 flight attendants would severely disrupt Air Canada's operations. But any labor disruption is expected to be short as the government is almost certain to swiftly legislate employees back to work, as it did in June when another Air Canada union went on strike.
The airline has said it will operate on a partial schedule, including codeshare flights operated by its partner airlines.
If there is no deal this weekend, Canada's labor minister Lisa Raitt plans to meet face-to-face with both sides on Monday, her spokeswoman said.
"Any work stoppage would negatively impact Canada's economy and threaten our fragile economic recovery," Raitt said on Friday.
Unionized sales and ticketing agents struck for three days in June, spurring the federal government to introduce back-to-work legislation.
WestJet Airlines Ltd, Canada's No. 2 airline and Air Canada's biggest domestic competitor, said on Sunday it will add extra flights to its schedule in both Canada and into the United States in the event of a strike.
Air Canada's flight attendants have been without a contract since March 31 and they rejected a tentative deal in August.
Key sticking points in the talks include a change in pensions for new hires, wages and working conditions.
Editing by Janet Guttsman