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Canadian MRO shuts down, Air Canada searches for new provider

By Hpanchal on March 23, 2012

Aveos Fleet Performance, a supplier of MRO services to Air Canada, has filed for protection under Canada's Companies' Creditors Arrangement Act, immediately ceasing all operations and commencing an asset-liquidation process. Former Aveos customer Air Canada recently announced a contingency plan that will cover the carriers' MRO needs previously undertaken by the company.

According to an Aveos press release announcing the firm's cessation of operations, much of the blame for these events lies at the hands of one unnamed company. Aveos filed for protection, the release stated, "due to uncertain work volume across its business lines from Aveos’ principal customer. Since the beginning of the year, its principal customer reduced, deferred, and canceled maintenance work, which resulted in approximately $16 million in lost revenue in less than two months. While Aveos remained ready, willing and able to perform such work, such work did not materialize. This was a devastating blow to Aveos."

The customer in question tried to keep Aveos afloat, submitting a last-minute business offer, but it apparently was not enough to save the maintenance company from shutting down. “For some time we have attempted to work for a consensual agreement with Aveos' principal customer," Eugene Davis, chairman of Aveos' board, said in a statement.

Air Canada's daily aircraft maintenance is handled in-house at facilities across Canada, but for upkeep once given to Aveos, Air Canada has turned to a number of parties in both Canada and the United States. For a longer-term option, Air Canada officials are on the hunt for a new provider.

In a press release announcing the carrier's temporary plans, Air Canada's Vice President, Maintenance and Engineering, Alan Butterfield, sent a message to MRO companies around the world: Come to Canada.

"Given the insolvency and unexpected closure of Aveos, we encourage MRO companies from across Canada and around the world to conduct due diligence and assess which of the former Aveos businesses may be viable in Canada under new ownership," he said in a statement. "Air Canada has a strong preference for working with a Global MRO which has an interest and ability to provide component, repair and overhaul services in Canada, with particular emphasis given to Montreal, Winnipeg, Vancouver and Toronto. There exists a pool of well-trained, qualified and talented people available in these cities."

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