Air Canada has served notice that it intends to lock out its 3,000 pilots Monday, the same day another union, which represents thousands of ground crew and mechanics at the airline, is set to strike.
All eyes are now expected to turn to the federal government, which has in the past expressed serious concerns about flight disruptions at the country's biggest airline.
On Thursday, after negotiations to reach a new collective agreement fell short, Air Canada announced it had served 72 hours notice to the pilots union that a lockout could begin as early as 12:01 a.m. ET on Monday.
A deadline passed Thursday at noon for the what the airline had called its "best, last and final offer" — without a deal being reached.
The airline made its most recent offer Wednesday, which was less than a month after Labour Minister Lisa Raitt offered both sides a new mediator and a six-month process to help them settle contract negotiations — a gesture that was welcomed by the airline and union at the time.
"We need to bring closure to the ongoing climate of labour uncertainty at Air Canada which is affecting our customers, destabilizing the company and our operations, and damaging the Air Canada brand," Duncan Dee, the airline's executive vice-president and chief operating officer, said in a statement Thursday.
The pilots expressed frustration with their employer latest offer.
"The corporation pulled a dramatic u-turn (Wednesday) on the first day of our return to bargaining," Capt. Paul Strachan, president of the Air Canada Pilots Association, said in a statement.
"After committing to a federal mediation process that was to last up to 180 days, the corporation instead chose to table what it termed its 'final' offer only 23 days into the process, without any serious effort to bridge our differences by negotiating in good faith."
The lockout Monday would coincide with a strike by thousands of ground crew and mechanics at Air Canada.
Talks broke off late Tuesday between the airline and the International Association of Machinists and Aerospace Workers, which represents 8,600 Air Canada ground crew and mechanics.
The union had rejected a new labour agreement two weeks ago, but returned to the bargaining table this week. According to the union, talks broke after the airline balked at a list of demands from the union.
Raitt said Wednesday she was concerned about the prospect of strike action at Air Canada over the March Break.
The federal government was once again being urged not to intervene in Air Canada's labour negotiations by critics who contend it does little to mend the airline's frayed relations with employees.
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