Air Canada asks top court to reject maintenance ruling in lawsuit fight

MONTREAL -- Air Canada has asked the Supreme Court to intervene to overturn a court ruling that requires the carrier to keep maintenance operations in the country.

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The Montreal-based airline said Tuesday it is seeking leave to appeal a Quebec Court of Appeal decision in November. That ruling upheld a lower court's 2013 decision that backed a lawsuit filed by the Quebec government.

The province argued that Air Canada (TSX:AC) breached its legal obligations under the federal Air Canada Public Participation Act that privatized the airline in 1988 to keep heavy maintenance operations in Quebec, Ontario and Manitoba.

Air Canada has argued that it respected the law by continuing to conduct aircraft maintenance at its three Canadian facilities in Montreal, Winnipeg and Mississauga, Ont., even though heavy maintenance was transferred outside the country.

It also told the court that the Quebec and Manitoba governments -- Manitoba intervened to support Quebec's lawsuit -- have no jurisdiction because aviation is a federal matter.

Quebec launched its lawsuit after Aveos Fleet Performance, which obtained creditor protection, closed in 2012 in a move that laid off 2,600 employees, including about 1,700 in Montreal.

The union that represented Aveos workers said the country's highest court may grant the airline's request because it involves an important federal law that affects several provinces.

"But it's still disappointing to see Air Canada fight this battle against the former Aveos workers and against the federal law," David Chartrand, Quebec co-ordinator of the International Association of Machinists and Aerospace Workers, said in a news release.

By stretching out the legal battle, the carrier is doing everything in its power to save itself from its responsibilities, he added.



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