Air Canada has awarded a Hong Kong firm a serious contract to carry out heavy upkeep on 56 of its wide-body jets, sparking considerations about Chinese language spies bugging the planes and plane changing into trapped in China if a navy battle erupts with Taiwan.
The upkeep firm, HAECO, unveiled its main Air Canada cope with fanfare on Feb. 28, 2024, changing ST Aerospace firm, which carried out the work at its Texas facility from 2017 to 2022.
The association with HAECO was signed final September throughout a interval of more and more acrimonious political discord and navy tensions between Canada and China, which has assumed quite a lot of political and judicial management over Hong Kong. The deal, whose worth is unknown, was not introduced final fall.
“It’s a head scratcher, for certain,” mentioned Phil Gurski, president of Borealis Risk and Danger Consulting, and a former senior analyst on the Canadian Safety Intelligence Service.
“Given what China has finished right here by way of interference in our elections, and working secret police stations, the prudent strategy could be, in the interim, much less China, no more China,” Gurski mentioned. “I’d be hitting the pause button fairly rattling rapidly.”
Margaret McCuaig-Johnston, a board member on the China Strategic Dangers Institute, additionally voiced disapproval and wasn’t shocked the brand new upkeep deal was stored underneath wraps for months as Canada and China traded barbs for many of 2022 and 2023.
“I’ve critical considerations about sending enterprise away from our closest allies to a rustic that has handled Canada within the final six years with malign intent and has, as its first precedence, Chinese language pursuits,” mentioned McCuaig-Johnston, additionally a senior fellow with the College of Ottawa’s Institute for Science, Society and Coverage. “Giving full entry to every of our planes doesn’t strike me as a safe tactic.”
“Now we have to watch out to not be too suspicious, however on the similar time, we’ve been proven so many instances that China takes benefit of our naivete,” she added.
Monitor file for security and reliability
Air Canada spokesman Peter Fitzpatrick mentioned the service employed HAECO after requesting proposals from totally different plane upkeep suppliers.
“Following prudent enterprise apply, we do consider suppliers every now and then, and on this case we positioned a few of our base upkeep with HAECO following an RFP,” Fitzpatrick wrote. “We chosen HAECO, which is totally licensed by Transport Canada (TC), EASA and FAA regulatory authorities, due to their well-established monitor file for security and reliability, and they’re a provider to main international airways all over the world.”
Transport Canada confirmed HAECO is an authorized international upkeep group.
For its half, HAECO says it undergoes common audits and approvals by regulatory authorities to make sure adherence to worldwide requirements. “We reject any allegations that we might compromise our integrity, and stay dedicated to upholding the very best requirements of security and high quality for all our clients,” wrote spokeswoman Tracey Kwong.
However McCuaig-Johnston defined firms working in China are legally required to observe orders from Chinese language intelligence companies, or threat prosecution. They have to maintain spying operations secret.
Fitzpatrick didn’t reply to questions on why Air Canada picked a Hong Kong firm, regardless of rising Canada-China political and navy tensions.
He additionally didn’t touch upon Chinese language intelligence brokers probably conducting eavesdropping operations in first-class seating areas the place high Canadian enterprise and political leaders have a tendency to sit down and work on lengthy journeys.
Video cameras, hidden microphones and even Wi-Fi-enabled gadgets could be illicitly put in in passenger cabins — unbeknownst to flight crews — to seize screens, messages or chat as executives get pleasure from a drink or two over dinner.
French intelligence officers allegedly bugged Air France Concorde jets and different abroad flights within the Nineteen Nineties. U.S. and Canadian safety companies warned executives travelling in firstclass, saying they need to assume conversations had been monitored. U.S. and U.Ok intelligence companies have additionally monitored cell phone calls from jet cabins.
Why airways outsource upkeep to China
Plane upkeep technicians in China earn simply over $10 an hour, in comparison with triple that in Japan and Australia, in accordance with a 2023 research of the aviation upkeep, restore and overhaul (MRO) trade in Northeast Asia.
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Chinese language firms additionally get pleasure from decrease prices to construct, function and preserve airplane hangars.
On the similar time, U.S. MRO amenities are dealing with rising capability issues due to plane upkeep technician shortages.
HAECO’s Air Canada contract covers heavy upkeep on 38 Boeing Dreamliner 787 and 18 Airbus A330 jets for 5 years, with a five-year extension possibility.
HAECO didn’t reply to requests for remark. In its information launch, HAECO Chief Industrial Officer Gerald Steinhoff mentioned: “We’re very happy to companion with Air Canada and are assured that our experience will guarantee the very best stage of service and assist for his or her fleet.”
It was maybe not shocking that HAECO didn’t announce Air Canada as a brand new consumer final fall, given the frictions in Sino-Canadian relations on the time.
In 2023, Canadian media organizations, lawmakers, and intelligence companies uncovered China’s efforts to intervene in a number of Canadian elections allegedly to undermine and defeat candidates vital of Beijing. A Chinese language diplomat was expelled.
A Canadian public inquiry is underway into the alleged interference.
China denied interfering in Canadian politics. In an obvious retaliation for the inquiry, China eliminated Canada from its record of accredited Chinese language tour group locations.
China additionally was accused of working secret police stations in higher Toronto and Montreal; it was caught flying a high-altitude spy balloon over Canada; and two Chinese language scientists in Manitoba allegedly misappropriated harmful virus cultures from a excessive safety federal authorities laboratory in Winnipeg. The scientists had been fired and left Canada. RCMP are investigating.
In mid-September 2023, Canadian and U.S. naval ships sailed by means of the Taiwan Strait between mainland China and Taiwan as a part of a freedom of navigation operation.
The Canadian assist infuriated Beijing. China responded by sending a service strike group into the world that included an plane service,12 different warships and 26 fighter jets.
China claims historic rights to all South China Sea waterways. A global tribunal rejected its declare.
A Chinese language fighter jet additionally fired flares in entrance of a Canadian Navy helicopter patrolling the South China Sea on Oct. 29.
Defence Minister Invoice Blair accused the Chinese language pilots of being reckless and endangering lives.
China considers Taiwan a renegade province and goals to “reunify” the island with communist China. Most Taiwan residents reject that plan.
At odds with ‘friend-shoring’
Air Canada’s contract seems to be at odds with the Canadian authorities’s public coverage of “decoupling” commerce with China and different authoritarian nations, whereas participating in “friend-shoring” or shifting commerce to friendlier democratic international companions to chop provide chain dangers.
“That’s why so many firms are getting out of China, not moving into there proper now,” McCuaig-Johnston mentioned.
Her Strategic China Dangers Institute thinks China annex Taiwan is “not a distant risk.”
“President Xi Jinping has repeatedly reiterated the Chinese language Communist Get together’s need to ‘reunify’ the island with the mainland and refuses to rule out using drive to take action. High US intelligence officers declare that Xi has ordered the Chinese language navy to have the capabilities able to invade Taiwan by 2027,” the institute mentioned in a report.
If a battle erupts, Canada could impose sanctions. Nevertheless, China has proven it is going to retaliate in opposition to Canada and its firms “with something it might probably,” McCuaig-Johnston mentioned.
Canadian jets and different property in Hong Kong threat being seized. After Russia illegally invaded Ukraine and confronted sanctions, Russia seized 400 foreign-owned passenger jets.
Canadian aerospace staff react
After HAECO introduced its deal, Canadian aerospace staff reacted coolly on the LinkedIn skilled networking platform.
Scott McNab, who recognized himself as a civil aviation inspector at Transport Canada, acknowledged:“Work that ought to be finished in Canada. This can be a Canadian Service and the expert upkeep jobs ought to be in Canada the place Canadians pay to fly on Air Canada.” One other Transport Canada inspector agreed. McNab didn’t reply to a telephone message.
A 3rd man who recognized himself as an Air Canada plane upkeep employee questioned the economics and high quality of labor finished by abroad heavy upkeep firms.
“Deliver again our personal heavy upkeep,” the employee mentioned. “The poor work finished by these third-party firms prices twice as a lot when the plane return from a verify and require days of extra work to be finished to repair all the issues attributable to sub-par work at these firms.”
Aerospace analyst Michel Merluzeau recommended Air Canada maybe had “little alternative” however to rent HAECO for Dreamliner and A330 heavy upkeep on account of capability shortages.
“You must compromise the place you go and get it. There’s a number of demand and we’ll must deliver again (MRO) capability to North America sooner or later. For now, the businesses in China are actually good firms and so they do an excellent job.”
Air Canada’s Aveos chapter
Air Canada had a heavy upkeep operation till 2004, when it was spun off and renamed Aveos.
By 2012, Aveos went bankrupt. It was liquidated amid allegations that Air Canada didn’t ship jets for repairs and solicited undercut bids from offshore rivals, breaching necessities in its privatization legislation that every one its plane upkeep be carried out in Canada.
By 2016, Ottawa eliminated the only-in-Canada upkeep requirement.
McCuaig-Johnston mentioned Canadian lawmakers could wish to revisit the problem.
Air Canada spends greater than $700 million yearly on plane upkeep however doesn’t disclose how a lot is by its personal staff versus exterior distributors.
ST Aerospace, the Texas operation the place Air Canada beforehand despatched its Dreamliners, didn’t reply to messages. ST Aerospace nonetheless does “base upkeep” on Air Canada’s Boeing 777 airplanes.
Smaller Air Canada Boeing 737 and Airbus A 320 jets bear heavy upkeep in Canada at U.S. aviation big AAR Corp. amenities in Trois-Rivières, Quebec, and Windsor, Ontario, and an Avianor facility close to Montreal.
HAECO Hong Kong is an affiliate of Swire Pacific, a publicly-traded Asian conglomerate that owns a forty five% stake within the Hong Kong airline Cathay Pacific, which it co-owns with government-owned Air China (30 per cent), and Beijing managed Hong Kong authorities (9 per cent). Swire additionally has substantial actual property, sugar, Coca-Cola bottling operations, and different enterprise pursuits throughout mainland China.
Below stress from China in 2019, Cathay Pacific allegedly buckled and fired 26 of its Hong Kong staff who marched in pro-democracy airport protests in opposition to Beijing. Cathay Pacific CEO Rupert Hogg additionally was compelled out.
Critics recommended these strikes highlights how Swire Pacific acts to protect its long-standing enterprise pursuits in China.
