Air Canada will begin cancelling flights from Thursday in preparation for a potential nationwide shutdown this weekend as contract talks with its flight attendants remain deadlocked.

The airline said it would phase in cancellations over two days, with limited flights dropped on Thursday, more on Friday, and a complete halt to Air Canada and Air Canada Rouge operations by Saturday if no agreement is reached.

The Canadian Union of Public Employees, representing about 10,000 flight attendants, issued a 72-hour strike notice on Wednesday. The work stoppage is set to begin at around 1 a.m. ET on Saturday. In response, Air Canada issued a lockout notice.

Passengers on affected flights will be contacted directly and offered full refunds. The carrier said it had also arranged for alternative travel options through other Canadian and international airlines where possible.

“We regret the impact a disruption will have on our customers, our stakeholders and the communities we serve,” said Air Canada CEO Michael Rousseau.

Earlier this month, 99.7% of union members voted to authorize a strike. The union has described its main concerns as “poverty wages” and unpaid work during ground time, saying the company has refused to address core issues.

Air Canada has warned of potential disruptions and said it reached an impasse after the union rejected binding arbitration. The company’s latest offer included a 38% increase in total compensation over four years, with a 25% raise in the first year.

According to the union, the proposal remains “below inflation, below market value, below minimum wage – and still leaves flight attendants unpaid for all hours of work.”