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TORONTO (AP) — Air Canada said Tuesday it will gradually restart operations after reaching an agreement with the union for 10,000 flight attendants to end a strike that disrupted the travel plans of hundreds of thousands of travelers.

The union first announced the agreement early Tuesday after Air Canada and the union resumed talks late Monday for the first time since the strike began over the weekend. The strike is affecting about 130,000 travelers a day at the peak of the summer travel season.

Canada’s largest airline said flights will start resuming Tuesday evening. Flight attendants walked off the job early Saturday after turning down the airline’s request to enter into government-directed arbitration, which allows a third-party mediator to decide the terms of a new contract.

The union said the agreement will guarantee members pay for work performed while planes are on the ground, resolving one of the major issues that drove the strike.

“Unpaid work is over. We have reclaimed our voice and our power,” the union said in a statement. “When our rights were taken away, we stood strong, we fought back — and we secured a tentative agreement that our members can vote on.”

Chief executive Michael Rousseau said restarting a major carrier is a complex undertaking and said regular service may require seven to 10 days. Some flights will be canceled until the schedule is stabilized.

“Full restoration may require a week or more, so we ask for our customers’ patience and understanding over the coming days,” Rousseau said in a statement.

The two sides reached the deal with the help of a mediator early Tuesday morning. The airline said mediation discussions “were begun on the basis that the union commit to have the airline’s 10,000 flight attendants immediately return to work.” Air Canada declined to comment further on the agreement until the ratification process is complete. It noted a strike or lockout is not possible during this time.

Earlier, Air Canada said rolling cancellations would now extend through Tuesday afternoon after the union defied a second return-to-work order.

The Canada Industrial Relations Board had declared the strike illegal Monday and ordered the flight attendants back on the job. But the union said it would defy the directive. Union leaders also ignored a weekend order to submit to binding arbitration and end the strike by Sunday afternoon.

The board is an independent administrative tribunal that interprets and applies Canada’s labor laws. The government ordered the board to intervene.

Labor leaders objected to the Canadian government’s repeated use of a law that cuts off workers’ right to strike and forces them into arbitration, a step the government took in recent years with workers at ports, railways and elsewhere.

“Your right to vote on your wages was preserved,” the union said in a post on its website.

Air Canada operates around 700 flights per day. The airline estimated Monday that 500,000 customers would be affected by flight cancellations.

Aviation analytics firm Cirium said that as of Monday afternoon, Air Canada had called off at least 1,219 domestic flights and 1,339 international flights since last Thursday, when the carrier began gradually suspending its operations ahead of the strike and lockout that began early Saturday.

Toronto’s Pearson International Airport, Canada’s largest, said it will deploy additional staff to assist passengers and support startup operations.

Passengers whose flights are impacted will be eligible to request a full refund on the airline’s website or mobile app, according to Air Canada.

The University of Hawaii Economic Research Organization (UHERO) has released its latest forecast, and the economic outlook is grim.

“The Hawaii outlook has deteriorated since the time of our last report,” the report states. “This is primarily due to actual and threatened U.S. tariff hikes that are much larger than anticipated, as well as adverse effects on increased federal policy uncertainty around trade, immigration, spending and tax cuts, and other areas.”

UHERO believes the local economy will fall into a mild recession by the end of the year. 

In a video discussing the report’s findings, UHERO assistant professor Steven Bond-Smith said, “GDP growth will slow in both the U.S. and Hawaii, but with Hawaii’s already slow growth rate, the slowdown tips us into a recession.”

Bond-Smith goes on to say tourism is among the sectors under stress as “uncertainty remains elevated.”

According to the report, “the most damaging effect on Hawaii of President Trump’s aggressive tariff policies may well be to the visitor industry. This will be felt through several channels: the adverse impact of high tariffs on major source country economies, the discouraging effects of uncertain international visitor regulations and enforcement and avoidance by travelers who are upset by these and other administration policies.”

So far this year, the Japan market is still sluggish. Canadian visitors to the U.S. have dropped significantly. With that said, Hawaii started the year positively, with the statewide visitor census up 2% in the first two months of the year compared to last year.

However, UHERO calls this the “calm before the storm,” and it has reduced its tourism outlook for 2025-2026 significantly.

“We now expect arrivals to fall 4% over the next two years, a drop of 400,000 visitors,” the report said. 

“Over 2025-2027 the pace of decline will be the biggest on the international front, with Japanese arrivals falling by more than 6% this year, before stabilizing in 2026. … U.S. arrivals will decline 3% by 2026, with downside risk should a recession develop. Total visitor arrivals will not reclaim their 2024 level until 2028.”