Aveos Fleet Performance Inc., a private company that maintains many of Air Canada's aircraft, shut down its plants on Sunday, locking out at least 2,400 workers and telling them not to return to work.
Approximately 1,800 of the affected employees are based in Montreal, while 350 are in Winnipeg and 250 are in Vancouver, according to the International Association of Machinists and Aerospace Workers.
"The maintenance component that supplies work to the Air Canada fleet has effectively ceased operations," Lorne Hammerberg, the union's local president in Winnipeg, told CBC News.
"The base manager and his senior managers came down today to the hangars, told the guys they were no longer in operation and to remove themselves from the premises."
Aveos posted a sign at its Winnipeg plant late Sunday afternoon, stating, "We regret to advise you that effective immediately, Aveos Fleet Performance Inc. has ceased the operation of airframe maintenance."
Union officials in Vancouver confirmed that employees at the Aveos plant there had been told to go home and leave all their equipment and personal items behind.
Aveos officials did not return calls by CBC News for comment on Sunday.
Hammerberg said he fears total job losses at Aveos, since there has been no talk of restructuring the company to date.
Aveos started out in 1937 as Air Canada Technical Services, the airline's in-house maintenance division. It became an independent company an October 2007 and was renamed Aveos the following year, according to its website.
Hammerberg said the Aveos plant in Winnipeg has maintained Air Canada's Airbus and Embraer fleet.
"Between ourselves, Montreal and Vancouver, we have the expertise to do any type of aircraft," he said.
Air Canada is the firm's largest customer — it provides about 90 per cent of its maintenance overhaul work. Its exclusive contract expires in June 2013 and Air Canada has issued a request for proposals for future contracts.
Hammerberg said union officials had heard there were "some financial issues with the company" over the past couple of weeks, but they had no idea a total shutdown was in the works.
"At first, I thought it was a joke because, of course, management has not informed anybody in the union that this was happening," he said. "I started making phone calls, and it was absolutely no joke."
The union does not know what the latest development could mean for Air Canada's maintenance program, he added.
The union, which represents aircraft machinists, mechanics, baggage handlers and ramp personnel, has feared for the future of Aveos after Air Canada moved to subcontract some of its work offshore.
Air Canada has moved maintenance of landing gear and engines out of Aveos's facilities and is subcontracting work to other maintenance providers, including in China. The airline has also delayed some work until the fall.
Air Canada spokesman Peter Fitzpatrick told CBC News the airline did not have much to say about the situation at Aveos.
"We do not comment about speculation concerning our suppliers," Fitzpatrick said in an email late Sunday.
Fitzpatrick said the bulk of Air Canada's scheduled heavy maintenance is done by Aveos, but added the airline has "always obtained additional services from other [maintenance, repair and operations] providers."