Aveos files CCAA proceedings, ceases Airframe maintenance operations

By Caroline Salls

Pittsburgh, March 19 - Aveos has initiated proceedings under the Companies' Creditors Arrangement Act in the Superior Court of Quebec after it ceased its Airframe maintenance service operations on March 18, according to a company news release.

The company said it was forced to file CCAA proceedings, in part, because of uncertain work volume across its business lines from Aveos' principal customer.

Since the beginning of the year, Aveos' principal customer reduced, deferred and cancelled maintenance work, which resulted in about $16 million in lost revenue in less than two months, the company said in the release.

Aveos said it will make decisions on its other operations as it seeks court protection to give it time to assess its options.

The company employs roughly 2,600 people across Canada, the release said.

"This was an extremely difficult decision, one we made only after lengthy and careful consideration of all other options," Aveos Fleet Performance president and chief executive officer Joe Kolshak said in the release.

Air Canada financing

According to an Air Canada news release, Air Canada has offered $15 million of debtor-in-possession financing to Aveos.

Air Canada said the DIP financing is similar to an offer it extended to Aveos over the weekend and is designed to stabilize Aveos for the benefit of stakeholders and employees so it can proceed with a more orderly restructuring.

Air Canada said this stabilization should allow Aveos to reopen some of its facilities and recall some of its employees, which should in turn allow Air Canada to induct some additional maintenance work with greater confidence over the coming days and weeks.

In addition to approval by Aveos, the DIP financing is subject to court approval.

FTI Consulting Canada has been appointed to direct and supervise the CCAA process as the company's court-appointed monitor.

Aveos Fleet Performance Inc. is a Montreal-based full service maintenance, repair and overhaul provider to the aviation industry.

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