Air Canada plane servicer files for creditor protection

Mon Mar 19, 2012 6:21pm EDT
 
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By Allison Martell and Euan Rocha

(Reuters) - The private company that maintains some of Air Canada's planes laid off workers and filed for creditor protection on Monday, blaming Canada's No. 1 airline for much of its financial difficulty.

In the filing to a Montreal court, Aveos Fleet Performance Inc said Air Canada had recently deferred or reduced maintenance work done through Aveos, reducing Aveos' revenue by C$16 million ($16 million) in less than two months.

"While Aveos remains ready, willing and able to perform such work, the loss of such work has been devastating to Aveos' financial position," it said, noting that Air Canada has been seeking alternate service proposals for heavy maintenance work.

Air Canada denied it had breached any contracts and offered the service provider a C$15 million emergency financing package. The airline said the Aveos filing would have no impact on its daily operations.

The International Association of Machinists and Aerospace Workers (IAMAW), which represents both Aveos workers and some 8,600 employees at Air Canada, said more than 1,200 Aveos workers would lose their jobs.

Air Canada is in separate labor disputes with its own machinists and with its pilots, although the government stepped in last week to pass legislation preventing a work stoppage.

AIR CANADA LEGACY

Formed from the in-house maintenance division at Canada's No. 1 airline, Aveos became an independent company in 2007. It employs some 2,600 people in Canada, most of them at its three big maintenance centers in Montreal, Winnipeg and Vancouver.   Continued...

 
Boeing's 787 Dreamliner aircraft is seen during a media preview at an Air Canada hangar at Pearson Toronto International Airport in Toronto, March 2, 2012. Air Canada has purchased 37 of the Boeing 787 and are to be delivered in 2014. REUTERS/Mark Blinch