Air Canada began cancelling flights on Thursday after receiving a strike notice from the flight attendants' union, warning all operations could be shut down by Saturday.

The airline that transports about 130,000 passengers daily announced this week that negotiations on a new collective agreement with its 10,000 flight attendants had reached an "impasse."

Chief operating officer Mark Nasr told reporters on Thursday that the airline had begun "a gradual suspension of Air Canada and Air Canada Rouge operations."

Without a deal, "all flights will be paused by Saturday early morning," he said.

In addition to demanding a wage increase, the union has argued flight attendants are not compensated for work on the ground, including during the boarding process.

The Canadian Union of Public Employees (CUPE) has dismissed Air Canada's latest offer as "below inflation (and) below market value."

CUPE issued a 72-hour strike notice at 12:01 am (0401 GMT) Wednesday, meaning the labor action could begin one minute past midnight on Saturday.

Air Canada maintains its offers have been fair. CUPE rejected a request to settle outstanding issues through arbitration.

Air Canada's head of public affairs Arielle Meloul-Wechsler said the union's approach to recent negotiations has been "superficial," in a press conference interrupted by more than a dozen flight attendant protesters.

Federal labor minister Patty Hajdu said the dispute was causing widespread "anxiety" and urged both sides "to come back to the bargaining table and get this done now."

Air Canada, the country's largest airline, flies to 65 countries and operates nonstop service to 180 cities.

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