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The Globe and Mail

Air Canada seeks approval from Quebec court to terminate Aveos contracts

The Aveos plant is shown in Montreal, March 28, 2012.

Graham Hughes for The Globe and Mail/graham hughes The Globe and Mail

Air Canada says it has filed documents with the Quebec Superior Court asking to cancel its contracts with Aveos Fleet Performance Inc., which has shuttered its doors and filed for creditor protection.

Aveos filed for creditor protection last month and laid off more than 2,600 employees across the country when it ceased operations.

An Air Canada spokesman said Wednesday the company is asking to end the contracts and for clarity in Aveos's dismantling process.

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Air Canada wants to "facilitate direct negotiations with the various maintenance suppliers, including those identified through the divestiture process, to achieve viable, competitive long-term arrangements," Peter Fitzpatrick said.

Frustrated former Aveos employees have accused the Harper Conservatives of being in a conspiracy with Air Canada by not enforcing a law they say requires heavy maintenance work to be done in Canada.

If Air Canada's motion is successful, it would make it more difficult to sell Aveos as one business — and save the jobs of some 2,600 employees, International Association of Machinists and Aerospace Workers Canadian general vice-president Dave Ritchie said Wednesday.

He added that the government needs to step in to prevent jobs from being lost to overseas companies.

"We have a problem because the federal government has to date refused to step up on this issue and Air Canada's legal actions contradict the commitments of its CEO Calin Rovinescu," Mr. Ritchie said in a statement.

"These court actions contradict the commitment Mr. Rovinescu gave to the parliamentary Standing Committee on Transportation, Infrastructure and Communities in early April of this year. He said Air Canada would participate in any effort to find new investors to create a new MRO that would provide jobs to Aveos workers. This is not the way to go about it."

The Montreal-based airline has said it has sent several aircraft to government-approved Canadian and international maintenance providers since the Aveos closure.

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For the long-term, it is taking proposals from maintenance suppliers and said it will give preference to suppliers that have or will have some portion of operations in Montreal, Winnipeg, Vancouver or Toronto.

Air Canada said last week its first-quarter results, scheduled for release May 4 ,will include $120-million in charges related to the shutdown of the insolvent aircraft repair and overhaul provider.

Meanwhile, the province of Quebec has said it's willing to provide financial support to potential buyers of Aveos as long as they maintain jobs in Montreal.

It is also taking Air Canada to court, aiming to force it to adhere to the law enacted when the airline was privatized in 1988.

Montreal-based Phoenix Aerospace Inc. said last Friday it was interested in re-launching part of Aveos's maintenance activities as a prelude to a major expansion project.

Phoenix Aerospace currently employs about 90 full- and part-time workers and is prepared to hire dozens of terminated Aveos workers in the short-term to complete the refurbishment of an Air Canada Airbus A320 that sits in an Aveos hangar.

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