Police keep Air Canada employees and Aveos workers apart during a protest in Montreal on Monday, March 19, 2012.
Photograph by: Phil Carpenter, The Gazette
MONTREAL – A filing Monday for bankruptcy protection by Aveos Fleet Performance Inc. in Quebec Superior Court’s commercial division details catastrophic corporate finances and abysmal relations with its main client, Air Canada.
Aveos alleges the Montreal-based airline has even refused to deliver planes for long-scheduled maintenance.
The request for protection under the Companies’ Creditors Arrangement Act shows revenues for Aveos and its United States division, Aero Technical U.S. Inc., slumped by $16 million in “less than two calendar months” this year because Air Canada has “reduced, cancelled and deferred maintenance work with Aveos” since the start of 2012.
“The loss of such work has been devastating for Aveos’s financial position,” the request states.
In addition, the company’s finances have been hit by “crushingly high labour costs, rising fuel prices and reduced airline traffic.”
That has made it unable to compete with low-cost aircraft MRO (maintenance, repair and overhaul) service providers in Latin America, according to the company.
Aveos itself owns Aeroman, a fast-growing MRO facility in El Salvador.
Aveos stated that as of March 9, it had accumulated $60 million in accounts payable, which are bills to be paid.
“Most of" these, the court filing added, "are more than 30 days past due.”
As of September, the filing added, Aveos’s liabilities exceeded the book value of its assets by more than $165 million.
By January, that disparity had shot up to $219.8 million.
As a result, Aveos posted a fourth-quarter loss last year of $48.9 million.
Aveos, which has some 3,000 workers, expelled those who were working from three its sites late Sunday and locked its factory gates in Montreal, Winnipeg and Mississauga, Ont.
Hundreds of employees gathered early Monday at the Montreal facility, next door to Air Canada’s head office, to protest against what their union called “a savage shutdown.”
The lawyer steering the filing by Aveos, Guy Paul Allard of Montreal law firm Fraser Milner, said he could not answer questions about the company’s situation.
Air Canada was expected to issue a statement Monday about how Aveos’s sudden shutdown will affect its already troubled operations.
Vehicle and foot traffic on the main road leading to Air Canada's head office in St. Laurent continued to be blocked before noonhour Monday, as the protesting aircraft-maintenance workers who stationed themselves on Côte Vertu Blvd. W., just west of Highway 13. Vehicles were being allowed to exit, but not to enter.
Police spokesperson Constable Daniel Lacoursière reported "no incidents."
"There's been no change to report," he added at 1:30 p.m.
The protesting employees had been adruptly cast adrift when Aveos padlocked it doors Sunday. They continued to vent anger throughout the morning at what Jean Poirier, a union delegate at Aveos, termed "pure and simple treason" by Air Canada.
At least 200 protesters milled about, causing a considerable traffic tie-up. The size of the crowd started to diminish around the noon hour.
Aveos has about 1,800 employees in Montreal.
There was no word over how long the standoff, which also cut off access to the Aveos facilities, would continue.
Just before 9 a.m., several Air Canada head office employees who tried to walk through the crowd of protesters were turned back. So was a head-office intern.
Some were escorted away by Montreal police who, Lacoursière said, had been called to the scene to maintain order.
The future of 1,800 aerospace jobs and whether the city of Montreal has a role in trying to save them are expected to dominate question period when Montreal city council convenes on Monday afternoon.
Richard Bergeron, leader of the Projet Montréal opposition party on Montreal's city council, arrived at the protest site in mid-morning and expressed support for the Aveos workers.
He said he had filed a motion at council demanding the city sue Air Canada and the federal government, if the Quebec government doesn't do so, for alleged breach of a 1988 contract that required Air Canada to keep fleet-maintenance jobs in Montreal.
"This is a battle that has started," Bergeron declared in a later news release:
"We have to win this for the workers. We have to win this for Montreal."
The aerospace industry accouns for an estimated 47,300 Montreal-area jobs, Bergeron said, and "the region is a world leader in this industry."
Bergeron and opposition leader Louise Harel of Vision Montreal called upon the administration of Mayor Gérald Tremblay to “show leadership” in the wake of the padlocking Sunday afternoon. Aveos did nearly all of its business with Air Canada.
Harel tweeted that “Air Canada cannot play Pontius Pilate” when it came to Aveos, and the city should show leadership in seeking to protect the jobs that appear jeopardised by the plant’s closing.
About 8:30 a.m., Craig Allison, an Aveos interior mechanic and one of those protesting, had said in a phone interview that foot traffic to Air Canada had not until then been impeded:
"Anybody walking is getting through," he said, shortly before that changed.
Allison described the mood of the workers as "pretty sombre."
He started with Air Canada in 2000, and became an Aveos employee when the maintenance firm was split off.
"People aren't getting any answers," he said.
On Sunday, Aveos had instructed its Montreal employees to leave the company premises at 5:30 p.m., and to take their tools and belongings with them.
Workers were advised to contact Aveos for further instructions, several people told The Gazette in emails and voicemails.
Aveos was formerly owned by Air Canada, which still accounts for about 85 per cent of its revenues.
Allison, 50, said he received a call from the company about 6 p.m. Sunday, telling him there was "no work.
"I was told I am on permanent layoff and will be receiving layoff papers during the week."
The Aveos maintenance base in Montreal, near the Air Canada head office, can accommodate "upwards of four (aircraft), depending on how big they are," Allison said.
It has done work on planes as big as the Boeing 777.
The number of aircraft at the base has now been cut to two, Allison said, a now-stripped-down Air Canada Airbus 320 in the middle of a 60-day check and an Air Canada Airbus 330 with "the landing gear off it."
"Other than the landing gear," the latter plane is in shape to fly, he said.
Over the past "24 to 36 months," Allison said, the maintenance base has changed "from a very busy hangar facility to an eerie calm."
James Mennie of The Gazette contributed to this report.
Source: http://www.edmontonjournal.com
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