Air Canada said early on Sunday it had reached a tentative agreement with its pilots union over a new four-year collective agreement, in a last-minute deal that will avert a near-term strike or lockout.

Air Canada is finalizing plans to suspend most of its operations, likely beginning Sunday, as talks with the pilot union are nearing an impasse over "inflexible" wage demands, the country's largest airline said on Monday.

Canadian Prime Minister Justin Trudeau said federal officials are applying the required pressure on Air Canada and its unionized pilots to reach a new labor deal and avoid a service disruption at the country’s flagship carrier.