Air Canada flight attendants rejected the airline's proposal for binding arbitration on Tuesday and continued direct talks, the Canadian Union of Public Employees said on Tuesday.

The Montreal-based airline, which transports about 130,000 customers a day, said the union representing flight attendants made a recent counteroffer seeking “exorbitant” pay increases, and has rejected an offer to enter third-party binding arbitration.

Air Canada flight attendants' union would need to notify their intention by end of the day Tuesday if they intend to walk off the job on Saturday.