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Air Canada flight attendants protested outside the federal Labour Minister's constituency office Thursday after she asked the Canada Industrial Relations Board to review stalled contract talks at the airline, effectively rendering a strike illegal.

J.P. Moczulski/The Canadian Press

Union leaders are pressing Air Canada to return to contract talks, but the airline is turning its attention to wooing consumers after narrowly avoiding a strike.

Instead of restarting negotiations, the country's largest airline launched a seat sale Friday. "Take advantage of special savings with this time-limited offer to popular destinations," the carrier said in its e-mail to customers.

The marketing push came soon after Air Canada had complained to the Canada Industrial Relations Board that the Canadian Union of Public Employees bargained in bad faith and made unnecessary strike threats. The airline asked the board to award damages for loss of revenue caused by the labour dispute deterring customers.

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CUPE poured cold water on that idea. "Instead of making bogus complaints, Air Canada should recognize the frustration of its flight attendants, come back to the bargaining table and negotiate a deal that acknowledges the sacrifices its workers have made for the airline over the past decade," CUPE national president Paul Moist said in a statement Friday. Air Canada emerged from bankruptcy protection in 2004.

The CIRB acknowledged that it doesn't normally award any monetary compensation or damages arising from complaints over bad-faith bargaining, but the board has historically ordered parties back to negotiate or to address specific issues.

Management and union officials met Friday at the CIRB as a first step in deciding whether the 6,800 flight attendants perform an essential service – an issue that federal Labour Minister Lisa Raitt wants addressed. Her decision to refer the labour dispute to the CIRB halted a strike planned for Thursday. CUPE could have staged an illegal walkout but, facing fines of $10,000 for each Air Canada CUPE leader, the union cancelled the work stoppage.

Ms. Raitt also asked the CIRB to either impose a settlement or refer the matter to binding arbitration, if it's deemed that the bargaining process is a lost cause. Hearing dates will be set next week.

"Minister Raitt's manipulation of the Canada Labour Code and the CIRB is indefensible," Mr. Moist said. Industry observers, however, say CUPE will need to challenge Ms. Raitt's tactics in the Federal Court of Canada since the board doesn't have the authority to reverse course.

Major sticking points in the labour dispute include wages and working conditions. As well, employees want job protection to guard against a proposed low-cost carrier, which would introduce reduced pay for newly hired flight attendants.

Raymond James Ltd. analyst Ben Cherniavsky said an undercurrent in the dispute has been workers' dissatisfaction over management salaries and bonuses considered excessive by the union, notably those paid to former chief executive officers Robert Milton (1999-2004) and Montie Brewer (2004-2009), and the current CEO, Calin Rovinescu.

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Flight attendants have rejected two tentative agreements, despite union brass endorsing those deals.

"Some of this is Robert Milton's legacy. It's a distrust of management and the union bargaining committee, after years of sacrifices," said Mr. Cherniavsky, who added that Mr. Rovinescu established some credibility by navigating the airline through a financial crisis in 2009, but recent rifts have eroded that goodwill.

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