MONTREAL (Reuters) - Airbus is ready to lock out its Canadian A220 workers if a latest contract offer is rejected on Wednesday, according to sources and a conciliator's recommendations seen by Reuters.

Airbus and the International Association of Machinists and Aerospace Workers union (IAM) agreed to conciliation after the company's estimated 1,300 Montreal-area A220 workers rejected two offers and a tentative agreement.

Recommendations from a conciliator in the Canadian province of Quebec's labor ministry noted that Airbus will "exercise its right to lockout on May 2" if a contract is not reached by that date.

Airbus said it supports the conciliator's recommendations. The European planemaker's Canadian unit is trying to boost production and control costs on the loss-making jet.

"Since we have no intention of returning to the bargaining table, the conciliation process initiated by the union has given us one last chance to reach an agreement that will put in place the conditions required to ensure the continuity of our activities," said Patrick Bertin, head of human resources at Airbus Canada, in an emailed statement.

"We are counting on a positive outcome."

Unions have recently capitalized on tight labor markets and high inflation to win hefty contracts at the bargaining table, with airline pilots, autoworkers and others scoring big raises in 2023.

The Airbus talks in Canada are being watched by IAM leaders in Washington state, where Boeing's production workers want wage increases exceeding 40% over three to four years.