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Hope fades for aveos workers as no buyer steps forward - China Beauty Spa Equipment by fdhjkl rfghjtkl

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Hope fades for aveos workers as no buyer steps forward - China Beauty Spa Equipment by
Article Posted: 10/05/2013
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Hope fades for aveos workers as no buyer steps forward - China Beauty Spa Equipment

Business,Business News,Business Opportunities
MONTREAL — Hope appears to be fading for most former Aveos employeesafter no potential buyers expressed interest in the aircraftmaintenance firm's airframe unit, says a report by the monitoroverseeing the company's restructuring. The business employed about 1,500 of the 2,600 people employed byAveos before it closed its operations in March and obtained courtprotection from creditors under the Companies' CreditorsArrangement Act. Work on repairing and overhauling airframes has increasingly goneto low-cost countries in Asia, Latin America and other elsewhere. Aveos has said that its airframe business was not viable,suggesting the most interest will be focused on the components andengine repair divisions. Air Canada has reached agreement with Aveos Fleet Performance Inc.that could facilitate the sale of these two divisions, according aJune 5 report from the court-appointed monitor assisting with theAveos restructuring.

The airline had earlier filed a motion last month to terminatecontracts with its former subsidiary, but later withdrew the effortand agreed to continue negotiations. "The Air Canada agreement results in a higher probability that boththe engines and components business will be sold to a party thatcan restart operations as it will have the support of Air Canada,Aveos' largest customer," wrote Greg Watson and Tony Vanderlaan ofFTI Consulting. However, they cautioned there are still many risks with the sale. Former Aveos employees have accused the Conservatives of conspiringwith Air Canada by not enforcing a law they say requires heavymaintenance work to be done in Canada.

Air Canada has said it fulfills the requirements of the Air CanadaParticipation Act by employing 2,400 employees to do maintenancework in Montreal, Toronto, Vancouver and Winnipeg. The Air Canada and Aveos agreement includes a new exclusivecontract through 2018 for the engine business, which will beoffered for sale along with the engines facility. "Air Canada has agreed to provide its support and consent to theassignment of the new engines contract, so long as the successfulpurchaser meets Air Canada's requirements," said the monitor. Canada's largest carrier also agreed to conduct a request forproposals for about 1,000 component parts serviced by Aveos. Workon the five- to 10-year contract must be done at Aveos' facility.

Air Canada will provide Aveos with the result of its process byJuly 11, while Aveos continues to try to sell the componentsfacility. The monitor didn't provide any details about the first phase ofbidding which ended Wednesday for all but the components part ofAveos' operations. The first deadline for the components businessis next Wednesday. German-based Lufthansa Tecknik was expected to be among the leadingbidders. The company's subsidiaries employ 26,500 workers and serve750 clients around the world.

The Quebec government has signalled its willingness to providefinancial support to potential buyers as long as they developviable businesses that sustain jobs in Montreal.

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