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Air Canada continues to operate normal schedule following Aveos closure

March 22, 2012 -- Air Canada assures customers that it continues to operate its normal schedule and that they can book and travel with confidence despite Aveos Inc.ís closure. The airline has identified qualified and government approved maintenance facilities in Canada and the U.S. to perform work previously done by Aveos.

The transition to new service providers is underway and will have no impact on customers. For example, three aircraft scheduled for maintenance this week will go to Canadian maintenance providers currently used by other Canadian and international airlines. In addition, arrangements are being made to complete the maintenance of the three aircraft remaining at Aveos facilities.

The closure of Aveos’s facilities will not have an impact on Air Canada’s day-to-day aircraft maintenance and repair activities or on its scheduled operation. This day-to-day maintenance work is performed directly by Air Canada at its own facilities across Canada – including Montreal, Winnipeg, Vancouver and Toronto – by Air Canada’s 2,300 maintenance employees.

About Air Canada’s Aircraft Maintenance Operations.


Air Canada Comments on Aveos Notice of Closure

March 20, 2012 – Air Canada today expressed disappointment at Aveos Fleet Performance Inc.’s (Aveos) decision to reject its offer of $15 million in emergency financing and instead permanently cease operations. If accepted, the $15 million Debtor-in-Possession (DIP) financing could have assisted in stabilizing Aveos for the benefit of its employees and stakeholders and supported an orderly restructuring. This stabilization would have permitted Aveos to reopen certain of its facilities and recall certain of its employees, which would have in turn allowed Air Canada to provide additional maintenance work to Aveos.

To ensure Air Canada’s customers are not inconvenienced and are able to continue traveling and booking Air Canada with confidence, the airline will be activating its contingency plan. This will ensure that maintenance work continues in full compliance with all regulatory requirements and is consistent with the high standards of Air Canada’s maintenance programs. 

Air Canada believes that Aveos has failed to act in the interests of its employees, customers and other stakeholders by abruptly abandoning its business while other viable options to closure were available.  Management at Aveos has failed repeatedly to attract new business to expand and diversify its revenue stream. By its own admission in court filings, the company is not cost competitive and has suffered operating losses for several years.

Aveos claims that Air Canada has withheld or directed elsewhere maintenance work it should have properly received. Since the beginning of 2011, Air Canada has undertaken 135 airframe checks and Aveos performed 123, or 91 per cent of them. As well, Aveos performed 52 of 56, or 93 per cent, of engine checks performed for Air Canada. Work was sent to third parties only when Aveos was unable to perform it and only in accordance with the terms of the commercial agreements between the parties and the applicable collective agreements.

Contrary to Aveos’s court filings and public statements, Air Canada has been very supportive of Aveos and has provided financial and other assistance to the company. Among other things, Air Canada:

  • Participated in the 2010 out-of-court restructuring through a $22 million term note, that among other things allowed Aveos to defer payments without interest penalty when its cash reserve fell below a prescribed level.
  • Committed up to $50 million to reimburse Aveos for airframe operating losses as part of the 2010 restructuring.
  • Paid or advanced approximately $9 million on March 15, 2012 in respect of various invoices including invoices in dispute.
  • Offered Aveos on several occasions financing support to permit an orderly restructuring and allow it to remain in business, including most recently the $15 million DIP financing.

Net amounts owing by Aveos to Air Canada to date are in excess of $35 million.

About Air Canada and Aveos

Air Canada and Aveos are two separate entities. Air Canada sold its technical services division in 2004.  This company was then sold to a consortium of private investors in 2007 and subsequently changed its name to Aveos in 2008. 

The Aveos workforce is independent from Air Canada and is covered by a separate collective agreement.

About Air Canada’s Aircraft Maintenance Operations.


Air Canada comments on Aveos closures and its contingency planning

March 19, 2012 – Air Canada today provided the following comments concerning Aveos Fleet Performance Inc. (Aveos), a separate and independently owned and managed supplier to Air Canada, that provides maintenance, repair and overhaul (MRO) services to airlines, including Air Canada.

Air Canada has been advised that Aveos has filed for insolvency protection under the Companies' Creditors Arrangement Act (CCAA).

These events at Aveos, while disappointing, have no impact on Air Canada’s day-to-day aircraft maintenance and repair activities, referred to as “line maintenance.”  The airline’s line maintenance has always been performed directly by Air Canada, at the airline’s own facilities by Air Canada’s 2,300 maintenance employees.  The airline typically performs its line maintenance activities overnight or between flights, as necessary.

Aveos has been providing Air Canada with airframe, engine and component work which, in the case of scheduled maintenance checks, is pre-planned.  The airline is prepared with a contingency plan to ensure continuity of this work and that it will continue to be performed in compliance with all regulatory and legal requirements. Should Aveos not be in a position to perform work, the airline is prepared to make arrangements with a number of other service providers, located primarily in the United States and Canada, with whom Air Canada has longstanding relationships.

Air Canada has been supportive of Aveos through various means and has been meeting all of its financial and legal obligations of its contractual arrangements with Aveos according to the terms of its commercial agreements.

About Air Canada and Aveos

Air Canada and Aveos are two separate entities. Air Canada sold its technical services division in 2004.  This company was then sold to a consortium of private investors in 2007 and subsequently changed its name to Aveos in 2008. 

The Aveos workforce is independent from Air Canada and is covered by a separate collective agreement.

About Air Canada’s Aircraft Maintenance Operations.

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