Air Canada, the country's biggest airline, filed for bankruptcy protection before a Toronto court on Tuesday, according to court documents.
The Montreal-based airline filed for protection under the Companies' Creditors Arrangement Act, which allows a firm to keep operating while it tries to file a restructuring plan.
The Canadian Auto Workers, a key union at Air Canada, said earlier on Tuesday it expected the airline to file for bankruptcy protection after failing to reach job cut agreements with other unions.
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