Aug 13 (Reuters) - Air Canada ( ACDVF ) is preparing to

halt most of its flights after its flight attendants' union

served a 72-hour strike notice on Wednesday, warning of a

walkout as contract talks over a pay deal stall.

The Canadian Union of Public Employees, representing more

than 10,000 cabin crew at the country's largest carrier, took

the step just hours after the airline asked Ottawa to step in.

The strike is set to begin at about 1 a.m. ET on Saturday.

Earlier this month, 99.7% of employees represented by the union

voted for a strike.

The disruption would affect about 130,000 customers a day,

Air Canada ( ACDVF ) said, adding that customers would be fully refunded

for canceled flights during the busy summer season.

The strike could hit some of the carrier's most lucrative

routes between Canada, the U.S., Europe and Asia as it prepares

to wind down operations over the next three days.

A prolonged work stoppage could lead to flight cancellations

and higher ticket prices at rival carriers.

The airline also issued a lockdown notice beginning 32

minutes after the strike. It had declared a deadlock in

negotiations on Tuesday, after the union rejected its proposal

for binding arbitration.

The carrier had offered a 38% increase in total compensation

for flight attendants over four years, with a 25% raise in the

first year.

However, the union said the offer was "below inflation,

below market value, below minimum wage - and still leaves flight

attendants unpaid for all hours of work".

Most airlines pay cabin crew only for time spent in flight,

but flight attendants in North America are seeking pay for all

hours worked, including boarding and waiting at airports before

and between flights.

"While we remain available for discussions with CUPE, we

have requested government-directed arbitration as we now view it

as the only certain avenue to bring closure to bargaining," Air

Canada ( ACDVF ) said in a statement.