Air Canada plane servicer shuts Canada operations

Tue Mar 20, 2012 7:43pm EDT
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By Leila Lemghalef and Allison Martell

MONTREAL/TORONTO (Reuters) - The company that services planes for Canada's biggest airline ceased Canadian operations and fired its workers on Tuesday, a new headache for an airline already facing arbitration over two labor disputes.

Aveos Fleet Performance Inc, which does heavy maintenance for Air Canada, posted a termination letter on its website on Tuesday afternoon addressed to "all employees."

"We regret to advise you that effective immediately your employment with Aveos Fleet Performance Inc is terminated. You are no longer required to report to the workplace," it said.

In a separate release, Aveos said it ceased Canadian operations and was liquidating its assets. The company also has about 1,400 employees in El Salvador, according to its website. It did not say what would happen to that business.

Aveos was once the in-house maintenance division at Air Canada and many of its 2,600 employees in Canada previously worked for the airline, some of them very recently.

It obtained bankruptcy protection on Monday, laid off workers in its airframe division and blamed Air Canada, its principal customer, for a liquidity crisis.

"For some time we have attempted to work for a consensual agreement with Aveos' principal customer. At this point, we have exhausted all measures," Chairman Eugene Davis said in a statement.

Air Canada had attempted to avoid the shutdown by offering Aveos a debtor-in-possession financing package on Monday. Aveos said the proposal was unacceptable to it and its lenders.   Continued...