Aveos Fleet Performance

Air Canada Technical Services

Aveos was created at the founding of Trans-Canada Airlines (TCA) in 1937 when it was the company's in-house maintenance division. TCA was renamed Air Canada in 1965 and a corporate reorganization in 1968 saw the maintenance division grouped under Air Canada Technical Services (ACTS).

Beginning in 1968, ACTS provided maintenance, repair and overhaul (MRO) services to non-Air Canada customers. With Air Canada entering bankruptcy protection in 2003, the relation between the airline and others subsidiaries like ACTS was affected. In 2004, ACE Aviation Holdings became the parent company of Air Canada and with this restructuring, a decision was taken to separate Air Canada Technical Services from Air Canada the airline. In 2005, ACTS became a member of the Airbus MRO Network.

In February 2007, Air Canada Technical Services reached an agreement to acquire 80% of Aeroman, the MRO affiliate of TACA Airlines, a Central American airline. On October 16, 2007, ACTS officially became independent when US investment firms Sageview Capital and KKR Private Equity Investors acquired a 70% stake in the company. This made these two US companies were the original investors of ACTS. On September 23, 2008, ACTS was rebranded and formally adopted Aveos Fleet Performance Inc. as their new name, as part of the process of becoming an independent company. The origin of the name Aveos comes from "av" which refers to the company's roots in aviation while "eos" signifies new beginning.

Aveos

Aveos, with its subsidiary Aeroman in El Salvador, provided nose-to-tail maintenance for Boeing, Airbus and Embraer aircraft. They worked with companies such as General Electric, CFM International, Hamilton Sundstrand and Honeywell. Aveos announced their new president and CEO, Joe Kolshak, on April 27, 2011.

Aeroman

Aeroman was established in 1983 to provide maintenance services for Taca Airlines. In 1992, Aeroman was certified by the Federal Aviation Administration(FAA) and in 2005 became a member of the Airbus MRO Network. As Aveos' subsidiary, Aeroman provides MRO services for narrow-body aircraft and if currently expanding its facilities. Located in San Salvador, its facilities are accessed by carriers from the US, Caribbean, Mexico, Central and South America.

Growth and Future Plans

In August 2009, Aeroman announced its intention to construct a new hangar at its facility in El Salvador at a cost of about $20 million, according to Ernesto Ruiz, CEO of Aeroman. The new hangar would create an eighth production line, toward its goal in the following seven years to have 16 production lines, generating 3,000 jobs, up from its then-current payroll of 1,600.

As of February 2011, Aeroman had reached the milestone of 1,000 checks (major maintenance orders completed) since its founding in 1983, with employment of 1,800. Its customer base included Southwest, Volaris, United Airlines, Iberia, Aerolineas Argentinas, Tame, Lan, and others.

Expansion after Aveos Liquidation

Aeroman remains open: its El Salvador operations are not part of the Aveos bankruptcy filing. Aeroman does not work on Air Canada planes, though the airline is now looking at lower-cost repair service options.

In a process that ended in April 2011, as part of Air Canada's spinoff of Aveos, roughly 4,000 Air Canada aircraft mechanics officially picked one of seven choices before them, including staying with Air Canada, transferring to Aveos, retiring, or resigning. The first choice of 2,136 of them was to stay with Air Canada. The airline was to keep line maintenance – routine checks – while Aveos was to specialize in overhaul maintenance. The International Association of Machinists and Aerospace Workers, which represents 11,000 Air Canada employees, contended that the spinoff of Aveos by Air Canada into a stand-alone entity in 2007 was illegal; union leaders also feared that Air Canada would send its heavy maintenance to low-wage countries or non-union shops after 2013, when its contract with Aveos expires.

The previous month, the International Association of Machinists and Aerospace Workers had expressed concern that hundreds of jobs in Canada at Aveos were at risk of being shifted to lower-wage jurisdictions at competing repair shops in places such as Nashville, Plattsburgh, N.Y., and Rome, N.Y., and to Central America. Marcel St-Jean, president of IAMAW Local 1751 in Montreal, said he was especially concerned about Aveos' expansion plans for its Aeroman division in San Salvador, the capital of El Salvador. "We are very scared that jobs will go to El Salvador. After mid-2013, there isn't any obligation on Air Canada's part to do heavy maintenance on the planes in Canada." In 2009, Canadian employees at Aveos earned between $1,700 and $5,500 a month, depending on their skills and experience, compared with $350 to $1,200 a month at Aeroman.