Air Canada maintenance firm gets bankruptcy protection

A private company that maintains many of Air Canada's aircraft filed for bankruptcy today as hundreds of its workers enraged by the sudden shutdown of operations blocked access to the airline's head office near Montreal's Trudeau Airport.

Air Canada spinoff shuts down operations in 3 cities; locked-out workers block airline's Montreal HQ

Laid-off Aveos employees block the main road leading to Air Canada's head office in Montreal on Monday. (Paul Chiasson/Canadian Press)

A private company that maintains many of Air Canada's aircraft filed for bankruptcy protection today as hundreds of its workers enraged by the sudden shutdown of operations blocked access to the airline's head office near Montreal's Trudeau Airport.

Aveos Fleet Performance Inc. posted notices on Sunday at its plants in Montreal, Winnipeg and Vancouver, locking out at least 2,400 workers in three cities — Montreal, Winnipeg and Vancouver — and telling them not to return to work.

It is the latest event surrounding Air Canada after a weekend of March break travel woes that saw an unusually high number of pilots call in sick, which caused some flights to be cancelled or delayed just as the airline was contending with weather problems and runway shutdown Sunday at Toronto's Pearson Airport. 

It comes amid Air Canada's during bitter contract disputes with its pilots and ground crews that saw the Conservative government intervene with back-to-work legislation to prevent a labour disruption. 

On Monday afternoon, a Quebec Superior Court judge agreed to place Aveos under bankruptcy protection for the next 17 days, saying the company needs time to try to get its business in order, the CBC's Katherine Canty reported from Montreal. 

Aveos said it was forced to make the move in part because of "uncertain work volume" from its principal customer. The company said Air Canada reduced, deferred and cancelled maintenance work, which resulted in about $16 million in lost revenue in less than two months.

"We deeply regret the job losses and the impact this decision has on our employees in Canada," Joe Kolshak, the company's president and chief executive officer, said in a release.

The company performs scheduled maintenance on the fuselage, engines and components of Air Canada's fleet.

Air Canada, which accounts for 90 per cent of Aveos's business, called the situation at Aveos "disappointing" but insisted in a statement on Monday that the Aveos shutdown would have no impact on the day-to-day "line maintenance" of Air Canada's fleet, which the airline said is performed by its own maintenance crews at Air Canada facilities.

"Should Aveos not be in a position to perform work, the airline is prepared to make arrangements with a number of other service providers, located primarily in the United States and Canada, with whom Air Canada has longstanding relationships," the airline said in a statement.

Air Canada has extended Aveos $15 million in emergency financing. The financing will help stabilize Aveos so it can continue with restructuring, including the reopening of certain facilities and recalling of its employees.

In turn, Air Canada said that stabilization would also allow them to induct some extra maintenance work in the coming weeks. 

Workers left in the dark

Earlier in the day, about 200 protesters gathered around and created a line to block Côte-Vertu Boulevard near Montreal's main airport and prevented Air Canada employees from entering the airline's office building, near one of the shuttered Aveos facilities.

The workers, who held picket signs calling on the federal Conservative government to intervene, told the CBC's Elias Abboud they had been left in the dark by the company.

The Aveos workers not on shift Sunday were told not to come in, and those on the floor were asked to leave and not return, Abboud said.

The notices posted by Aveos on Sunday merely said the company is no longer "performing airframe maintenance." 

The workers said they believe they will continue to receive their benefits for now but don't know when or if they'll get another paycheque.

"As far as they know they're laid off," Abboud said. "They don't know much more than that."

'A sense of treason'

Many are former Air Canada workers who were transferred to Aveos in 2011, said Marcel Saint-Jean, local president of the International Association of Machinists and Aerospace Workers, which represents the Aveos employees.  

Saint-Jean told CBC News the workers moved to Aveos under conditions from Air Canada after the airline gave the company a contract to provide maintenance work for its planes until 2014. But they face an unknown future, with desolation hanging over their heads, he said at Monday's protest.

"It's a sense of treason that we have right now, and Aveos and Air Canada should be ashamed of what they're doing to employees."

Liberal MP Denis Coderre, who showed up at the protest and talked to the workers, challenged Prime Minister Stephen Harper to fix the situation.

But Labour Minister Lisa Raitt, who recently tabled legislation to prevent a labour disruption at Air Canada, suggested Monday that the government has no role to play while Aveos seeks bankruptcy protection.

"My understanding is that Aveos is applying this morning for a restructuring under [the Companies' Creditors Arrangement Act], so it's a fact of that matter," the minister said. "It's not a fact of necessarily a labour issue."

Company spun off from airline in 2007

About 1,800 of the affected employees are based in Montreal, 350 are in Winnipeg and 250 are in Vancouver, according to the International Association of Machinists and Aerospace Workers.

Aveos started out in 1937 as Air Canada Technical Services, the airline's in-house maintenance division. It became an independent company in October 2007 and was renamed Aveos the following year, according to its website.

The union has worried about the future of Aveos after Air Canada moved to subcontract some of its work offshore. Air Canada has moved maintenance of landing gear and engines out of Aveos plants and is subcontracting work to Chinese and other maintenance providers. The airline has also delayed some work until the fall.