TORONTO — Air Canada says it will challenge a $426,000 penalty issued by the Canadian Transportation Agency (CTA), arguing the regulator’s expectations during a major labour disruption last summer were unrealistic.

According to CBC News, the penalty stems from the August 2025 strike involving roughly 10,000 flight attendants, which led to widespread cancellations over several days during one of the busiest travel periods of the year.

The CTA said its investigation found the airline “committed multiple violations” of subsection 18(1.1) of the Air Passenger Protection Regulations between Aug. 15 and 20, 2025. Specifically, the regulator determined that Air Canada did not meet rebooking requirements under the Air Passenger Protection Regulations when flights were cancelled for reasons beyond the airline’s control.

Based on the CTA’s list of notices of violations and related penalties, Air Canada’s $426,000 fine is the largest penalty issued by the agency over the past year.

Air Canada, however, strongly disputes the findings.

“The notice is unfounded in law and we will contest it,” the airline told CBC News.

During the disruption, the carrier said it rebooked approximately 200,000 passengers while managing operational constraints tied to the strike.

Air Canada also said the regulator failed to fully consider the steps it took at the time, including voluntary policies aimed at supporting affected travellers.

“We have filed a notice for review of this notice of violation with the Transportation Appeal Tribunal of Canada (TATC) on the basis that the CTA is required to take the diligence of airlines and real-world circumstances into account,” the company said.

Air Canada has until April 18 to request a formal review before the TATC.