VANCOUVER/OTTAWA (Reuters) - Air Canada braced on Wednesday for the possibility of a crippling strike during next week's busy March Break travel period even as Canada's labor minister signaled she was prepared to stop or limit any labor action if necessary.
Air Canada's 8,600 unionized mechanics, baggage handlers and cargo agents have said they will go on strike at one minute after midnight on Sunday night unless a contract agreement is reached beforehand, a move that analysts say would ground the country's biggest airline.
"If the machinists go out the airline does not fly. Period," said Robert Kokonis, managing director of airline consulting firm AirTrav Inc.
Labour Minister Lisa Raitt urged the two sides to negotiate a deal to avoid a strike, saying a work stoppage was "not in the best interests of the Canadian public or Canadian businesses".
"The government of Canada is committed to doing what it takes to protect the public interest and help unions and employers achieve constructive labor relations," she said in a statement.
Speaking later in the House of Commons, Raitt said she was "very concerned" by the impending strike but made no mention of introducing back-to-work legislation or other means that she has used in the past to prevent or halt strikes at Air Canada.
Asked on CBC television if she would introduce such legislation, she said: "We're not there yet ... Right now we're in a watching mode."
A strike would come at an awkward time for Air Canada as next week is Spring Break for schools in many parts of Canada and March is generally a busy flying month.
Air Canada's "lines of communication" with the union remain open, spokeswoman Angela Mah said, adding that the airline, which flies to more than 180 destinations on five continents, was endeavoring to minimize inconvenience to customers.
The union issued its strike notice after talks broke off on Tuesday.
"It became clear by late Tuesday afternoon that Air Canada was not prepared to make the necessary adjustments to reach an agreement that our members would accept," said Dave Ritchie, general vice-president of the Canadian arm of the International Association of Machinists and Aerospace Workers.
Even so, Ritchie said the union is available to resume bargaining "at a moment's notice".
This is the third time in nine months that Air Canada has faced a strike after a year of contract negotiations with all its unions.
Ticketing and customer service staff walked off the job for three days in June. In September, flight attendants were on the verge of a strike when the government stopped them.
The strike notice comes after 65 percent of the union membership who voted rejected a tentative four-year contract agreement.
There is still time for the two sides to reach a second agreement, PI Financial airlines analyst Chris Murray said, pointing out that they may not be so far apart given that the tentative agreement had been defeated by only a narrow margin.
"Even if they can't get something fully in place by Sunday, any labor interruption, I expect, would be very short-lived," Murray said.
Raitt has repeatedly said that a strike at Air Canada would hurt a still-fragile economy.
"I encourage both parties to continue bargaining and reach a new collective agreement as soon as possible," Raitt said. "The government is concerned that a strike is possible and is taking this situation very seriously."
Meanwhile, Air Canada remains in mediated labor talks with its pilots, who are also in a position to call a strike.
Air Canada's stock finished down 4 Canadian cents, or 4 percent, at 93 Canadian cents on the Toronto Stock Exchange.
Additional reporting by David Ljunggren in Ottawa; Editing by Janet Guttsman, Peter Galloway and Rob Wilson