Air Canada is Aveos's largest customer, providing about 90 per cent of its maintenance overhaul work. Its exclusive contract expires in June, 2013, and Air Canada has issued a request for proposals for future contracts.Andrew Vaughn/The Canadian Press
A union that represents 2,700 employees at Aveos Fleet Performance Inc. fears for the future of the aircraft maintenance company after Air Canada moved to subcontract some of its work offshore.
The International Association of Machinists and Aerospace Workers represents maintenance and overhaul workers at Aveos as well as Air Canada's mechanics, baggage handlers and ramp personnel.
The union's members at Air Canada had given notice they would strike March 12 after the two sides failed to reach a contract agreement but federal Labour Minister Lisa Raitt blocked that move last week.
Ms. Raitt said Monday she would follow up last week's intervention in the Air Canada labour dispute with back-to-work legislation.
In the Aveos negotiation, the machinists union is seeking conciliation – a process involving federal officials – in a bid to get more details about the financial difficulties facing the Air Canada spinoff.
"We're trying to determine what's going on because there's a lot of work that's exclusive to Aveos that Air Canada is not bringing in," Fred Hospes, chairman of the IAMAW District 140 Western Region, said in an interview.
Up to 300 jobs in Vancouver and more than 100 workers in Montreal and Winnipeg are at risk this summer, Mr. Hospes said.
Air Canada has moved maintenance of landing gear and engines out of Aveos facilities and is subcontracting work to other maintenance providers, including to China. The airline has also delayed some work until the fall.
"For sure there's going to be layoffs as a result of this," Mr. Hospes said.
"There's no doubt that Vancouver will be hit come the summer, starting in June. There's a possibility that airframe maintenance workers in Montreal and Winnipeg [will be]affected."
He said the union's concerns are heightened by Aveos's efforts last week to lay off nearly 100 workers, Air Canada's subcontracting moves and fears that required pension payments aren't being made.
The union also said Aveos has negotiated with a new benefit service provider that provides transferred Air Canada employees with benefits levels below what's included in the last collective agreement.
The union said federal authorities are verifying whether the former Air Canada Technical Services division is continuing to make required contributions to the employee pension plan. The company won't provide the union with proof that the payments are continuing.
Mr. Hospes believes Air Canada is moving work from Aveos because it is concerned about the company's financial situation and wants to protect its assets.
"If they should have a financial crisis at Aveos, I think Air Canada does not want their products in there."
The airline is Aveos's largest customer, which provides about 90 per cent of its maintenance overhaul work. Its exclusive contract expires in June, 2013, and Air Canada has issued a request for proposals for future contracts.
Air Canada spokeswoman Isabelle Arthur wouldn't specifically comment on its subcontracting moves.
"While the bulk of Air Canada's scheduled heavy maintenance is done by Aveos, we have always obtained additional services from other MRO [maintenance, repair and overhaul]providers as required," she said in an e-mail.
"Aveos has been a separate company from Air Canada since 2004. We do not comment on speculation concerning our suppliers."
Aveos spokeswoman Daniela Pizzuto declined to comment on financial difficulties facing the company or its efforts to address those challenges.
"When we're prepared, we'll let everyone know," she said in a brief interview.
In 2010, the company reached an agreement with its lenders to reduce its debt to $75-million from about $800-million.