Air Canada complies with plane service law, Ottawa told

Fri Mar 30, 2012 8:27am EDT
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By Susan Taylor

TORONTO (Reuters) - Air Canada is complying with a law that requires it to maintain aircraft-repair services in several Canadian cities, despite the closure last week of spin-off Aveos Fleet Performance Inc, a parliamentary committee was told on Thursday.

That view is good news for the Canadian government, which has come under growing pressure from unions and opposition members of Parliament who want it to force Air Canada to maintain facilities that were shut down earlier this month when Aveos ceased Canadian operations and laid off 2,600 workers.

Air Canada meets a provision in the 1988 law under which it was privatized that obliges it to keep maintenance and overhaul operations in Montreal, Mississauga, Ontario, and Winnipeg, Manitoba, said Pierre Legault, assistant deputy minister in the Department of Justice.

He cited a 2011 Ontario court ruling, which said that Air Canada's mechanics' union had failed to show that the country's biggest airline was failing to meet fleet-servicing requirements set out in the 1988 law.

"The judge also said that it was possible for Air Canada to indeed operate maintenance and overhaul, generally speaking, through its own operations and that there was no obligation to do it in a certain form," Legault told the committee.

"If you took different elements of the decision, you do come to the conclusion that, in fact, Air Canada can operate without Aveos. They have the obligation to maintain, overall, in Canada, but not necessarily through a specific form."

Montreal-based Air Canada said it currently employs 2,400 maintenance workers across Canada.

Opposition politicians have said that Air Canada engineered the spinoff and eventual demise of Aveos so that it could benefit from cheaper, non-unionized labor. Privately owned Aveos has said that Air Canada gave it insufficient work to stay in business.   Continued...

Boeing's 787 Dreamliner aircraft is seen during a media preview at an Air Canada hangar at Pearson Toronto International Airport in Toronto, March 2, 2012. REUTERS/Mark Blinch