Reuters: Regulatory News: Quebec puts Air Canada on notice over Aveos

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Quebec puts Air Canada on notice over Aveos Apr 3rd 2012, 21:34 Tue Apr 3, 2012 5:34pm EDT * Airline required to have Montreal repair center * Requirement is part of 1988 privatization law * Province gives airline 10 days to show compliance * Concern triggered by contractor's Montreal facility * Legal action threatened if response is inadequate April 3 (Reuters) - Quebec's attorney general said on Tuesday he had notified Air Canada of its legal obligation to keep a maintenance center operating in the province and would take legal action if he did not receive a satisfactory response from the country's No.1 airline. The province said in March it was considering legal action against Air Canada to keep a Montreal aircraft maintenance facility open. Its concern follows the closure of th e facility, o perated by an important Air Canada contractor. "This morning, in my role as attorney general of Quebec, I gave Air Canada formal notice with regards to its obligations and asked it to let me know - in a detailed, explicit and satisfactory manner - all the measures it will take to ensure that the operational and overhaul centers of Montreal remain there," Jean-Marc Fournier told reporters in a news conference in Quebec City. Fournier said Air Canada had 10 days to respond. He did not say exactly what sort of legal action could be in the offing after that. Aveos Fleet Performance Inc, once part of Air Canada's own maintenance unit, obtained creditor protection and laid off all of its 2,600 Canadian employees in March, including about 1,700 workers in Montreal. The Air Canada Public Participation Act, the law that has governed Air Canada's operations since its 1988 privatization, stipulates that the airline must maintain overhaul centers in Montreal; Winnipeg, Manitoba; and Mississauga, Ontario. "We have received the demand letter, and Air Canada is in full compliance with all aspects of the Air Canada Public Participation Act," said the airline's spokesman Peter Fitzpatrick in an email. Air Canada argues that it has more than 2,000 in-house maintenance employees across the country, including in the required centers, and that is sufficient to meet the location requirement. Testifying before a parliamentary committee last week, a federal Department of Justice official broadly backed that interpretation. Fournier disagreed. He also said that when Air Canada was privatized, the company assured legislators that the work done by Aveos would remain in Montreal. "It was in this context that the law was adopted," he said. Link this Share this Digg this Email Reprints

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