Air Canada Worried Aveos Layoffs Could Cause Delays

Air Canada said Monday it could be forced to cancel flights and strand thousands of passengers if the maintenance company that obtained creditor protection Monday is unable to complete repairs to several planes.

Despite saying earlier in the day it won't be affected by the closure, the airline's lawyers argued in vain Monday for a Quebec Superior Court judge to order Aveos Fleet Performance to not lay off more workers and meet its obligations to complete the repairs.

Three wide-body planes and several narrow-body aircraft are sitting in Aveos facilities across the country, some missing landing gear.

Air Canada lawyer Louis Belanger said the next 24 to 48 hours will be crucial in determining if the aircraft repairs can be completed on schedule. He said nearly 3,000 passengers daily could be affected if the planes aren't promptly returned to service.

Despite what it argued in court, Air Canada said in a news release that its fleet's maintenance and repair activities are done in-house and won't be affected by the plant closures.

"The airline's line maintenance has always been performed directly by Air Canada, at the airline's own facilities by Air Canada's 2,300 maintenance employees," the airline said in a statement.

Montreal-based Aveos said it has permanently shut its airframe repair business. The move will affect about 1,800 of the company's

2,600 employees.

The remaining employees repairing engines and components such as landing gear have not been let go but it wasn't immediately clear when they will be called back to work.

Aveos said it will be able to restart operations if it can secure liquidity and develop a restructuring plan.

"This was an extremely difficult decision, one we made only after lengthy and careful consideration of all other options," stated Aveos CEO Joe Kolshak.

Justice Mark Schrager denied an Air Canada request that would have forced Aveos to maintain operations and employment to complete the contracted repairs.

The airline was forced to cancel several flights over the weekend because it said several pilots called in sick, there was heavy fog and a fire closed a runway at Toronto's Pearson Airport.

The head of the pilots association denied it led a co-ordinated protest to have pilots book off sick. But Captain Paul Strachan said the stress of the labour dispute has had a clear effect on some workers.

The Canadian Industrial Relations Board will determine the merits of Air Canada's complaint that the pilots called in sick as a protest and that the action constituted an illegal strike after hearing from the two sides next week.

Aveos shut down three main plants in Vancouver, Winnipeg and Montreal, as well as other facilities in Edmonton, Calgary, Trenton and Mississauga. Aveos argues Air Canada is responsible for $10 million in severance payments owed to laid-off airframe workers.

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