MONTREAL, July 26, 2012 /CNW Telbec/ - Air Canada today provided
comments on the fifth report of the Chief Restructuring Officer (CRO)
of Aveos dated July 25, 2012. The CRO's latest report provides an
update following an agreement reached May 30, 2012 between Aveos and
Air Canada in which the airline agreed to arrangements with Aveos to
assist the maintenance, repair and overhaul (MRO) firm to find
potential purchasers for certain of its divisions.
Following the decision by Aveos in March 2012 to close its facilities in
Canada, Aveos proceeded with a court supervised divestiture process of
its three primary business divisions in Canada: airframe, engine and
component maintenance. Reports by the CRO of Aveos during this process
can be found on the website of the court-appointed monitor of Aveos,
FTI Consulting: http://cfcanada.fticonsulting.com/aveos/
In his July 25th report, the CRO of Aveos advised that Aveos has
received offers for the sale of all or certain assets of its components
maintenance division and discussions are ongoing. Air Canada continues
to work diligently through an RFP process to secure an experienced,
cost competitive MRO supplier for its components requirements and is
updating the CRO on the status of bids on an ongoing basis.
The CRO of Aveos also reported on July 25 that despite the concerted
efforts undertaken by Aveos, there were no offers received from parties
willing to buy or restart its engine maintenance business as a going
concern and resume operations at its facility.
As stipulated in the May 30th agreement between Aveos and Air Canada, both parties entered into an
exclusive contract until 2018 for engine maintenance at current market
rates of certain engine types used by Air Canada. The new contract
would become effective upon assignment by Aveos to a purchaser that is
among five parties identified by Air Canada to be equally acceptable in
terms of operational requirements. Air Canada remains confident in the
suitability of all five downselected engine MROs to meet its engine
maintenance requirements and the selection and awarding of the engine
maintenance contract is entirely at the discretion of the CRO of Aveos.
In a letter dated July 12, 2012 to the CRO, Air Canada reiterated its
preference to see the contract awarded to a supplier who will perform
the services in Canada. "As we continue to favour the selection of an
engine MRO capable of performing engine work in Canada, we urge you to
weigh this aspect heavily (which includes the potential for job
creation) as you award the contract," wrote Alan Butterfield, Air
Canada Vice President, Maintenance and Engineering.
As reported by the CRO of Aveos in his report of June 26th, discussions
with various North American and global airframe MROs "revealed that
there was no party who was prepared to entertain a restart option."
Consequently, Air Canada proceeded with a request for proposal (RFP)
process to select airframe MRO providers that meet the airline's
safety, reliability and performance standards in compliance with
Transport Canada requirements. On that basis, Air Canada is concluding
terms with the following MRO providers to perform scheduled airframe
maintenance on its fleet of 205 aircraft:
Premier Aviation Overhaul Center Inc. located in Trois-Rivieres, QC, and
Embraer Aircraft Maintenance Services, Inc. (EAMS) located in
Nashville, TN for its Embraer fleet.
AAR Corp. based in Wood Dale, IL, for its Airbus narrowbody fleet
(Airbus A319, A320 and A321 aircraft).
Israel Aerospace Industries' Bedek Aviation Group for its Boeing
Singapore-based ST Aviation Services Co. Pte. Ltd. (SASCO) for its
fleets of Boeing 777 and Airbus A330-300 aircraft.
The terms and conditions of commercial agreements between Air Canada and
its suppliers are confidential.
About Air Canada and Aveos
The closure of Aveos's MRO facilities in Canada has no impact on Air
Canada's day-to-day aircraft maintenance and repair activities. The
airline's 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
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.
Air Canada is Canada's largest domestic and international airline
serving more than 175 destinations on five continents. Canada's flag
carrier is the 15th largest commercial airline in the world and in 2011
served more than 33 million customers. Air Canada provides scheduled
passenger service directly to 59 Canadian cities, 56 destinations in
the United States and 63 cities in Europe, the Middle East, Asia,
Australia, the Caribbean, Mexico and South America. Air Canada is a
founding member of Star Alliance, the world's most comprehensive air
transportation network serving 1,356 destinations in 193 countries. In
2012, Air Canada was ranked Best International Airline in North America
in a worldwide survey of more than 18 million airline passengers
conducted by independent research firm Skytrax.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Air Canada's public communications may include forward-looking
statements within the meaning of applicable securities laws.
Forward-looking statements, by their nature, are based on assumptions
and are subject to important risks and uncertainties. Forward-looking
statements cannot be relied upon due to, amongst other things, changing
external events and general uncertainties of the business. Actual
results may differ materially from results indicated in forward-looking
statements due to a number of factors, including without limitation,
industry, market, credit and economic conditions, the ability to reduce
operating costs and secure financing, pension issues, energy prices,
employee and labour relations, currency exchange and interest rates,
competition, war, terrorist acts, epidemic diseases, environmental
factors (including weather systems and other natural phenomena and
factors arising from man-made sources), insurance issues and costs,
changes in demand due to the seasonal nature of the business, supply
issues, changes in laws, regulatory developments or proceedings,
pending and future litigation and actions by third parties as well as
the factors identified throughout Air Canada's public disclosure file
available at www.sedar.com. Any forward-looking statements contained in this news release
represent Air Canada's expectations as of date of this news release and
are subject to change after such date. However, Air Canada disclaims
any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required under applicable securities regulations.
SOURCE: AIR CANADA
For further information:
Isabelle Arthur (Montréal) 514 422-5788
Peter Fitzpatrick (Toronto) 416 263-5576
Angela Mah (Vancouver) 604 270-5741
Internet : aircanada.com