Then on August 15, 2025, news broke that Air Canada might be shutting down. That unfortunate situation was a result of a still ongoing labor dispute with the country’s largest airline. This crushing news has led to a major outcry from business interests and tourism operators all around the country. The implications of such a shutdown could severely disrupt travel, particularly impacting efforts to forge new customer relationships and trade partnerships at a time when businesses are already grappling with U.S. tariffs.
Matthew Jelley, chair of the Tourism Industry Association of Canada, expressed deep concern for the tourism sector, which is currently striving for stability amidst ongoing challenges. He argued that the timing of this dangerous potential shutdown is particularly devastating. The industry is now in its busiest season.
“We’re in the peak season of tourism and many tourism businesses are seasonal, and so what may be a calendar day may in fact be the equivalent of a week in their business.” – Matthew Jelley
The implications of Air Canada’s apparent willingness to walk away aren’t limited to traveler inconvenience and interrupted itineraries. Dan Kelly, president of the Canadian Federation of Independent Business, emphasized that removing the major national airline undercuts the already fragile economic landscape. He remarked on the broader consequences for businesses trying to diversify their markets within Canada and establish new trade connections abroad.
“Taking out the major national airline is just brutal, particularly right now,” – Dan Kelly
Kelly focused on the fact that hundreds of businesses are genuinely trying to find ways penetrating their brand during this momentous time. The threat from Air Canada’s threatened shutdown is existential. This would be a dangerous proposition that would make it more difficult for firms to attract new customers and trading partners.
Goldy Hyder, head of the Business Council of Canada, condemned the potential shutdown, stating that it would exacerbate existing pressures on critical economic supply chains. He cautioned that disturbing the nation’s air passenger travel would do immediate damage. Freight transport services—both through rail and trucking—would be devastated nationwide.
“At a time when Canada is dealing with unprecedented pressures on our critical economic supply chains, the disruption of national air passenger travel and cargo transport services would cause immediate and extensive harm to all Canadians.” – Goldy Hyder
Unsurprisingly, business groups are quite vocal about their concerns with the consequences that Air Canada’s possible shutdown would have. Further, they’ve clearly stated that protecting 20 – 25 percent of the normal flight volumes does not cut it. That’s particularly the case given these protected volumes won’t cover even most of the destinations Air Canada’s large passenger network typically connects to.
The broader consequences of all of this are playing out amid an incredibly tenuous economic environment. The travel and hospitality industry, already battered by a multitude of shocks in the past few years, is preparing for another blow. Jelley explained that every time the industry finds a glimmer of hope—with the recent U.S.
“Unfortunately the tourism industry has gone through a fair share of disruptions over the last number of years, and every time we think we get a clear moment, you know, something else comes in.” – Matthew Jelley
With the future uncertain as leaders on both sides of the labor dispute move further into talks, Air Canada’s future and its large network are at stake. The last update on this developing story was provided at 4:56 PM on August 15, 2025, just hours after the initial report revealed the potential shutdown at 12:09 PM.
