Transport Committee on March 29th, 2012

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

I want to start by speaking with regard to the employees, because, for me, what has happened with Aveos and the employees, especially the employees in Winnipeg, is a travesty. These are employees who were delivering a great service, who are highly skilled people. In Winnipeg we want to maintain those jobs, and I can say that across the country we want to maintain those jobs. This is an important industry for the Winnipeg aerospace industry. It is highly important to us, and we'd like to see it grow.

In light of that, you talked a little bit about looking at centres across Canada and encouraging growth in those centres. Are you looking at a plan that would try to bring along this pool of talent and make use of it? Could you give us a sense of what you would hope to accomplish there?

[Calin Rovinescu]

That is exactly the direction we are heading in. We want to identify pools of talent, Canadian and foreign MROs that are prepared to hire Canadian workers who have talent.

I might ask Duncan Dee, our chief operating officer, to talk a bit about the kinds of MRO opportunities we are looking at throughout Canada.

[Duncan Dee, Senior Vice-President, Corporate Affairs, Air Canada]

Thanks for the question, Mr. Toet.

In effect, the priority of Air Canada going forward is to try to find local suppliers in many of these communities, Winnipeg obviously being one of them, to take advantage of the fact that there are talented workers who are capable of doing the work and managing them so we can have a cost-competitive maintenance, repair, and overhaul centre to work alongside the workers at Air Canada who do much of the same work.

The priority for us is to find local suppliers, global MROs, global players who are interested in investing in these Canadian facilities, in these Canadian workers, to continue the work in Canada. It is not an intent of Air Canada to be sending our aircraft overseas to other places. Frankly, that would be an added burden on Air Canada to have to send aircraft to places to which we don't fly, to do maintenance. If we're able to do the work in our hometowns across this country, that's certainly the objective we've set for ourselves.

[The Chair, Conservative, Merv Tweed]

Thank you.

Monsieur Gourde.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

I would also like to thank the witnesses for being with us this morning.

You said that at Air Canada, the volume of maintenance business will increase over the coming years. As we know, Aveos had to declare bankruptcy. If that had not been the case, would the long-term contracts with this company have held?

[Calin Rovinescu]

I did not hear your question.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

If Aveos had not gone bankrupt, would you have wanted to continue doing business with them in 2012, 2013, 2014 and in subsequent years?

[Calin Rovinescu]

With some maintenance contracts, we tend to opt for long-term contracts. However, because of the Aveos bankruptcy, we signed some contracts that were quite short-term. In the industry, however, the general practice is generally to commit to longer time periods. For example, we had signed a contract with Aveos that would expire in 2013, next year, that is. We intend to opt for the long-term with several of the 67 Canadian companies that we are now considering.

As I was saying earlier, we have also encouraged foreign companies to set up in Canada. We have approached companies that manufacture engines, particularly MTU, Lufthansa Technik and AAR, as well as other businesses that might consider the possibility of setting up in Canada and make a long-term commitment to us.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

At Air Canada, you have some employees on staff who are responsible for maintenance, but you also have to have some outside people. You spoke earlier about a possible increase in jobs. It would seem that you have more needs, that air traffic is increasing and that you will therefore have to do more maintenance. You spoke of 60 to 67 Canadian companies that could provide maintenance services. Are you going to increase Air Canada's external maintenance accordingly?

[Calin Rovinescu]

No. We will probably start doing some things internally again. That is why it is likely that we will eventually hire very specific staff that we will need in-house at Air Canada. We have increased the number of maintenance employees by 35% since 2007 and we will continue to do so. So we will start doing some things in-house again.

In 2014, we are going to start replacing our fleet by introducing the Boeing 787, the Dreamliner. That new plane will require less maintenance. We must not forget that the purchase of new aircraft results in reduced maintenance costs, and as a result, in the work that needs to be done externally.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

The new companies you hire will need specialized employees. We are talking about high-level technicians and engineers. Aveos' employees will no doubt have the opportunity to join these new companies. In any case, if the contracts you awarded to Aveos before are given to companies that are still active on the market, they will have a lot more work. Do those companies have the necessary staff to meet Air Canada's demand?

[Calin Rovinescu]

You are quite correct. What will happen is that Aveos employees who have specific expertise will go find jobs with those other companies. If the companies have the talent necessary, we will give them contracts.

As I said, we have already started talks with some of those companies. We immediately called on two Quebec companies to do some work. They will need more staff to carry out the work, because in the past, they did not take care of those seven planes. That will create job opportunities for specialized people, which will allow Aveos' employees to find jobs in the other facilities. We will encourage those other facilities.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Will you still give priority to Canadian companies?

[Calin Rovinescu]

Absolutely. Not only will we give priority to Canadian companies, but we will also encourage foreign companies to come set up shop here and hire Canadians to do the work.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Let's talk about the total number of workers necessary for maintenance, including those inside and outside Air Canada. How many employees are needed across Canada? Is it 3,000, 4,000, 5,000?

[Calin Rovinescu]

That will depend on the people we find in Canada to do the work.

There were 2,600 people who worked for Aveos, while Air Canada has 2,400. Therefore, in total, there was a group of 5,000 people. I don't know if, with all the other airlines based in Canada, the same number will be needed.

Ideally, for these companies to be viable, they must be able to compete with foreign companies. For us, that will be an important point, as I said during my presentation. These companies that set up in Canada or that hire Canadian employees must be able to compete on a global basis. We have a talent pool of about 5,000 people made up of former Aveos employees and Air Canada employees.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you.

[The Chair, Conservative, Merv Tweed]

Ms. Chow, you have the floor.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Chairman, I'm going to share a bit of my time later on with my very shy and humble colleague from Winnipeg, Mr. Martin.

Close to the end of this meeting, I have a motion that would ask this committee to issue a summons for the appearance of the senior officials from Aveos, because they have refused to come to meet with us. I'm going to put a motion in to summon them.

Having said that, Mr. Rovinescu, just following your answer to Mr. Gourde, you basically didn't answer the question, so I want to be very precise. Between now and the end of the year, how many jobs in overhaul and maintenance—I'm not talking about your in-house shop, but the 2,600 people who are employed by Aveos—will now be performed outside Canada? Do you know?

[Calin Rovinescu]

I don't know that.

[Olivia Chow, NDP, Trinity—Spadina, ON]

You don't, okay. Thank you. That's where I thought it was going. You don't know what percentage, right?

[Calin Rovinescu]

No, because the way it will work—

[Olivia Chow, NDP, Trinity—Spadina, ON]

You already explained that, and I understood.

[Calin Rovinescu]

Yes, because the way it will work is that we will give—

[Olivia Chow, NDP, Trinity—Spadina, ON]

We want to see what's happening—