TORONTO - It was necessary for the federal government to intervene in Air Canada's labour disputes because a shutdown at the country's largest airline at a peak travel time could take a toll on the economy, Prime Minister Stephen Harper said Friday.

"The position of Air Canada is different," Harper said, speaking at an event at Toronto's Billy Bishop Airport.

"It is far and away the largest airline in the country and a shutdown of service on that airline would have significant impact not only on airline service to Canadians but on the transportation system as a whole and potentially on the economy."

He said the parties need to find a way to resolve their disputes without impacting the Canadian public -- a message also delivered by Labour Minister Lisa Raitt on Thursday when she blocked actions by the airline and two of its unions.

Raitt sent the disputes to the Canadian Industrial Relations Board to see how a work stoppage would affect the health and safety of Canadians -- a move she has used before to prevent a work stoppage by the airline's flight attendants.

Her latest intervention came as Air Canada threatened to lock out its pilots on Monday and the union representing its mechanics, baggage handlers and ramp crews threatened to strike on the same day.

While the board reviews the case, the airline cannot lock out its employees and the unions cannot start a strike.

Critics have said the Harper government -- which implemented back-to-work legislation when the airline's customer service agents walked out last year -- could throw Canada's entire system of labour relations into disrepute.

The prime minister said Friday that a part of him doesn't want to intervene, but it is essential to keep the airline flying, especially during the busy March Break travel period.

During the economic downturn, Harper said he sat down with Air Canada representatives who outlined concerns about their financial situation, asking for government assistance because of the dangers shutting down the airline would represent to the economy.

"I'll be darned if we will now sit by and let the airline shut itself down," Harper said.

"My concern is not management or labour, my concern is the broader Canadian public and I think the broader Canadian public overwhelmingly expects the government to act."

Canada's largest airline had threatened Thursday to lock its pilots out on Monday after they rejected the airline's latest contract offer. The International Association of Machinists and Aerospace Workers, which represents ground crew and mechanics, had previously set a strike deadline on the same day.

The pilots union and the machinists are the last two major unions without reaching new collective agreements since Air Canada restructuring under court protection nearly a decade ago.

Air Canada's employees have been trying to win back pay and concessions they gave up to help the airline restructure from April 2003 through September 2004.

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