Quebec threatens to sue Air Canada, Canadian government

The Government of Quebec is considering suing Air Canada and the federal government over the closing of Montreal service facility that was servicing Air Canada’s planes.

Reuters reports that the facility, once part of Air Canada’s own maintenance unit, was operated by Aveos Fleet Performance Inc., a private company that obtained bankruptcy protection on Monday. It ceased Canadian operations and laid off most of its 2,600 Canadian employees on Tuesday. That included 1,700 workers in Montreal.

“We will do all, all, all we can to keep the operations open, to see how we can help the workers and the company,” Quebec Premier Jean Charest told the province’s legislature.

“We will examine all the options available, including the possibility of taking legal action against the federal government.”

The federal law that has governed Air Canada’s operations since its 1988 privatization requires it to “maintain operational and overhaul centers” in Montreal as well as in Winnipeg, Manitoba, and Mississauga, Ontario.

Aveos has blamed much of its financial difficulty on Air Canada. It said the airline reduced the work it sent to Aveos, particularly in the last two months, precipitating a crisis.

Air Canada countered on Tuesday, saying it had given Aveos financial and other assistance.

The government of the province of Manitoba, where more than 400 jobs were lost, said it was touch with Quebec on Wednesday.

“We are eager to coordinate our response to the situation with Quebec,” said spokeswoman Rachel Morgan. She said it was too early to say whether Manitoba would take legal action.

According to Reuters, Air Canada said late on Tuesday that it would send planes scheduled for maintenance this week to an alternative service provider, Premier Aviation, in Trois-Rivières, Quebec, as part of a contingency plan.

The airline, Canada’s biggest, said it will ensure that all of its planes are properly maintained, including three aircraft currently at Aveos facilities. “We are confident the plan will avoid disruption to our customers,” it said.

PI Financial analyst Chris Murray said Premier, which does work for WestJet, was only one of a number of suppliers that could replace Aveos. He said StandardAero, which has a facility in Winnipeg, could likely do some of the engine work.

Murray said concerns about the shutdown affecting Air Canada’s business were overdone, and noted that traffic data was very strong. “Would you care if they changed catering companies?” he said.

Sam Hamad, Quebec’s economic development minister, told the Quebec legislature he had met with representatives of both Aveos and Air Canada on Tuesday and asked what the government could do to keep the plant open.

“We will not stop there. Together with the minister of justice, the attorney-general and the legal team, we are looking at all the options that exist for legal recourse against Air Canada to put pressure on Air Canada as quickly as possible,” he told legislators.

A spokeswoman for Denis Lebel, the federal transport minister, had no immediate comment. On Monday spokeswoman Genevieve Sicard expressed sympathy with workers affected by Aveos’s decision, while noting Aveos’s “decisions are that of a private company.”

Air Canada, which is trying to cut costs and change the way it operates, already has labor contract disputes with its pilots and machinists unions headed to binding arbitration. It faced a simultaneous strike and lockout earlier this month until the federal government intervened and ended up passing legislation to prevent a work stoppage.