BRENT JANG
Globe and Mail Update
Delta Air Lines Inc. has withdrawn from an aircraft maintenance contract with Air Canada Technical Services, a move that will trigger the loss of 700 jobs in Vancouver.
Atlanta-based Delta signed a deal two years ago to outsource the heavy maintenance of its wide-body Boeing 767s to Montreal-based ACTS.
Delta, which went into U.S. bankruptcy protection in September, 2005, originally intended to send its 767s to the ACTS plant in Vancouver until mid-2010.
But sources familiar with the plant said Tuesday that Delta began complaining in the fall of 2006 about the turnaround time to finish the labour-intensive, scheduled checks involving a top-to-bottom inspection of aircraft.
More important, Delta also had second thoughts about the costs of hiring Air Canada, noting that it could get similar work done at cheaper rates at Hong Kong Aircraft Engineering Co. Ltd., also known as Haeco, sources said.
Two factory lines at the Richmond site near Vancouver International Airport currently service the Delta contract, but they will be closed. One of two other lines devoted to in-house work for Air Canada's fleet of more than 40 Boeing 767s will also shut down. About 300 jobs will remain in Vancouver.
Chahram Bolouri, ACTS president and chief executive officer, said he regrets having to chop 70 per cent of the Vancouver work force.
“ACTS has worked extremely hard to make the relationship successful. Unfortunately, we are not in a position to meet Delta's cost expectations,” he said in a statement.
An industry insider said Delta's withdrawal would jeopardize the Vancouver operation's viability because ACTS would be able to transfer work on Air Canada's 767s to Montreal, where that aircraft is already being serviced.
Source: TheGlobeAndMail.com
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