Montreal Gazette: Aveos Fleet Performance on track for bankruptcy or merger: sources

MONTREAL – Aveos Fleet Performance Inc., which repairs most of Air Canada’s aircraft, could file for bankruptcy protection or merge soon, sources tell The Gazette.

Several insiders said Monday that the St. Laurent company of more than 2,500 employees, sold off by Air Canada in 2007 to pay the then-struggling airline’s debts, is no longer making employees’ pension contributions or maintaining their benefit packages, and is losing business. Air Canada represents roughly 85 per cent of its work under a contract due to expire next year.

Later Monday, Aveos issued a statement denying they had stopped making contributions. “Aveos has made and continues to make employee and employer payments to its pension plan in accordance with its obligations under the Federal Pension Benefits Standards Act,” the statement read.

One person close to the firm said several suppliers are accepting only cash payments rather than the usual 30-, 60- or 90-day bill invoices.

And Roger Morrissette, a delegate of Local 1751 of the International Association of Machinists and Aerospace Workers, said that a training class on a new parts-tracking system by consulting firm Ramco for about 30 Aveos employees was cancelled suddenly.

“My guys tell me the (tutor) told the class that Aveos didn’t have the means to pay him and left the classroom.”

Daniela Pizzuto, spokesperson for Aveos, said she could not comment on any substantive issue regarding operations or on rumours.

Ronnie Di Bartolo, founder and president of Trois Rivières MRO firm Premier Aviation, said he had not heard any official confirmation the firm would seek to place itself under protection from creditors or be acquired or merge with another firm.

“But starting about two months ago, I had some Aveos people placing calls and sending résumés, so I guessed they must know something we don’t know,” said Di Bartolo, whose firm sub-contracts business from Aveos.

The calls and CVs were from middle to upper management, he added, as well as from shop-floor workers.

Di Bartolo said that “we have not been approached” by Aveos to gauge interest in a merger or buyout. His much-smaller firm concentrates on airframe work, a segment that Aveos exited to focus on engines, systems and components.

Is he interested in any part of Aveos?

“I would possibly look at doing some contracts together, maybe for some larger clients, working hand in hand with them since they are better equipped than we are. So sharing work with them I would be interested, yes, on maybe commercial or military.”

Robin Wohnsigl, a former CEO of Air Canada Technical Services, as Aveos was named before being spun off, said from Washington that he asked Aveos CEO Joe Kolshak for a meeting at the MRO industry’s big annual trade show in Dallas between April 2 and 5. He was surprised, said Wohnsigl, when Kolshak said he didn’t know if he would be there or not. He found it odd because Aveos is usually a major exhibitor at the show.

“When I was CEO, I always made a point of being there – it was one of my best sales opportunities.”

Wohnsigl said he battled former Air Canada president Robert Milton when he included ACTS in Air Canada’s 2003 bankruptcy protection. Airlines are nervous about doing business with MROs in such precarious situations and tend to look for alternatives, and Wohnsigl lobbied hard to exclude ACTS from the protection filing.

Kolshak stepped in after CEO Chahram Bolouri left Aveos abruptly last May 2.

Di Bartolo said he would be “absolutely interested” in airframe work from Aveos, if it comes to that.

“But the sad part of this is that if they close down, there would be quite a few jobs lost. Some will be hired by other firms but there will always be job losses. But who knows what going to happen?”

Marcel St. Jean, president of IAMAW local 1751, which represents 1,700 Aveos workers, said that most employees are bracing for a company announcement this week or next.


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