Delta cancels Air Canada contract

March 6, 2007 at 6:03 PM

VANCOUVER, British Columbia, March 6 (UPI) -- Delta Air Lines Inc. canceled an aircraft-maintenance contract with Air Canada, triggering the loss of 700 jobs, Air Canada said Tuesday.

Delta, which hopes to exit from bankruptcy next month, said privately it could get similar heavy maintenance work on its wide-body Boeing 767 jets done more cheaply at Hong Kong Aircraft Engineering Co. Ltd., based at Hong Kong International Airport, The Globe and Mail reported Tuesday.

Delta also complained about the turnaround time to finish the labor-intensive scheduled checks involving a top-to-bottom aircraft inspection, the newspaper said.

Atlanta's Delta signed a five-year deal in 2005 to subcontract the maintenance work to Air Canada Technical Services' plant in Vancouver, British Columbia.

"ACTS has worked extremely hard to make the relationship successful," technical services Air Canada President Chahram Bolouri said. "Unfortunately, we are not in a position to meet Delta's cost expectations."

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