Hope fades for Aveos staff

MONTREAL — Hope appears to be fading for most former Aveos employees after no potential buyers expressed interest in the aircraft maintenance firm’s airframe unit, says a report by the monitor overseeing the company’s restructuring.

MONTREAL — Hope appears to be fading for most former Aveos employees after no potential buyers expressed interest in the aircraft maintenance firm’s airframe unit, says a report by the monitor overseeing the company’s restructuring.

The business employed about 1,500 of the 2,600 people who worked at Aveos before it closed its operations in March and obtained court protection from creditors under the Companies’ Creditors Arrangement Act.

Work on repairing and overhauling airframes has increasingly gone to low-cost operations in Asia, Latin America and elsewhere.

Aveos has said that its airframe business was not viable, suggesting the most buyer interest will be focused on the components and engine repair divisions.

Air Canada (TSX:AC.B) has reached an agreement with Aveos Fleet Performance Inc. that could facilitate the sale of those two divisions, according to a June 5 report from FTI Consulting Canada Inc, the court-appointed monitor assisting with the Aveos restructuring.

The airline had earlier filed a motion last month to terminate contracts with its former subsidiary, but later withdrew the effort and agreed to continue negotiations.

“The Air Canada agreement results in a higher probability that both the engines and components business will be sold to a party that can restart operations as it will have the support of Air Canada, Aveos’ largest customer,” wrote Greg Watson and Toni Vanderlaan of FTI Consulting.

However, they cautioned there are still many risks with the sale.

Union representative Jean Poirier said Air Canada’s move is good, but it doesn’t guarantee that engine and component work will return.

And there’s also nothing positive for the airframe segment.

“If Air Canada has backed down to guarantee contracts for engines and components, it’s good news, but you really have to see which contracts they will send (through),” he said in an interview.

About 500 former employees in Montreal have found jobs at Bombardier, CAE, Hydro-Quebec and in construction, but most are unemployed, Poirier said.

The union has accused the Conservatives of conspiring with Air Canada by not enforcing a law they say requires heavy maintenance work to be done in Canada.

Air Canada has said it fulfills the requirements of the Air Canada Participation Act by employing 2,400 employees to do maintenance work in Montreal, Toronto, Vancouver and Winnipeg.

The airline declined to provide details about the agreement with Aveos, which it says is confidential.

“We have provided arrangements that will assist Aveos’s chief restructuring officer in finding potential purchasers for the engine and component business,” spokeswoman Isabelle Arthur said in an email.

The Air Canada and Aveos agreement includes a new exclusive contract through 2018 for the engine business, which will be offered for sale along with the engines facility.

“Air Canada has agreed to provide its support and consent to the assignment of the new engines contract, so long as the successful purchaser meets Air Canada’s requirements,” said the monitor.

Canada’s largest carrier also agreed to conduct a request for proposals for about 1,000 component parts serviced by Aveos. Work on the five- to 10-year contract must be done at Aveos’s facility.

Air Canada will provide Aveos with the result of its process by July 11, while Aveos continues to try to sell the components facility.

The monitor didn’t provide any details about the first phase of bidding, which ended Wednesday for all but the components part of Aveos’ operations. The first deadline for the components business is next Wednesday.

German-based Lufthansa Tecknik was expected to be among the leading bidders. The company’s subsidiaries employ 26,500 workers and serve 750 clients around the world.

The Quebec government has signalled its willingness to provide financial support to potential buyers as long as they develop viable businesses that sustain jobs in Montreal.

Just Posted

Junior Chicken and bacon cheeseburgers Red Deer’s top orders on Skip the Dishes

Red Deer’s favourite home delivery choices include McDonald’s Junior Chicken burgers and… Continue reading

Companies to appear before panel today in public inquiry into B.C. gas prices

VANCOUVER — Four oil and gas companies are expected to answer questions… Continue reading

Comic-Con at 50: Bigger than ever, but at what cost?

LOS ANGELES — No one expected their culture would ever become mainstream… Continue reading

Lower gas prices slow annual inflation rate to Bank of Canada’s 2% bull’s-eye

OTTAWA — Canada’s price picture softened to two per cent last month… Continue reading

Trudeau to push trade pact in EU leaders’ summit as France moves ahead on CETA

MONTREAL — Lawmakers in France begin their ratification of the comprehensive trade… Continue reading

VIDEO: Reports say Lashana Lynch is the new 007

Daniel Craig will reprise his role as Bond one last time

Michael Dawe: Red Deer’s love affair with parades goes back 120 years

This morning, another Westerner Days Fair & Exposition kicks off with a… Continue reading

Angels beat Astros 7-2 for 5th straight W; Marisnick plunked

ANAHEIM, Calif. — The Houston Astros expected the Angels to retaliate against… Continue reading

Canada opts for blend of experience and youth for rugby sevens Pan Am teams

Some familiar faces will be missing as Canada looks to defend its… Continue reading

Asian entertainment industries grappling with #MeToo issues

When Wu Ke-xi was looking for a frightening plotline for her latest… Continue reading

Apple, Google continue inclusive push with new emojis

Apple and Google are rolling out dozens of new emojis that of… Continue reading

Hernandez, Gurriel lead Blue Jays to 10-4 win over Red Sox

Blue Jays 10 Red Sox 4 BOSTON — Teoscar Hernandez hit a… Continue reading

New head coach Nick Nurse preparing Canada for long FIBA World Cup run

TORONTO — Nick Nurse is going to prepare Canada’s men’s basketball team… Continue reading

Court of Appeal dismisses Paradise Shores arguments

A court will not hear arguments; sticks with appeal board’s ruling

Most Read