Performance killed Aveos: Air Canada
Airline president tells Commons committee MRO company couldn’t meet demands
Air Canada president Calin Rovinescu laid the blame for the bankruptcy of Montreal’s Aveos Fleet Performance Inc. squarely on “productivity issues” Thursday.
Under a barrage of hostile questions and charged accusations by opposition politicians as he testified before the Standing Committee on Transport, Infrastructure and Communities in Ottawa, Rovinescu said he had heard that other airlines had looked to do business with Aveos but backed away because of long turnaround times.
He also held firm in the face of tense exchanges, reiterating his assertion, bolstered by an Ontario Court judge’s ruling last year, that the airline is compliant with its 24-yearold privatization terms – principally the requirement to maintain overhaul centres in Montreal, Winnipeg and Mississauga.
Rovinescu also said Air Canada could hire “certain, very specific (Aveos) employees” back.
All 2,600 Aveos workers were transferred there last July, years after the airline sold off the division to pay down debts.
But he carefully avoided any specific commitments on how many and where, as well as which MROS (aircraft maintenance, repair and overhaul firms) the airline expects to sign for its aircraft repairs. Aveos did more than 90 per cent of Air Canada’s heavy repairs.
Rovinescu, however, forcefully and unequivocally dismissed what many Aveos employees have repeatedly claimed is Air Canada’s intention – to send work to Aeroman, Aveos’s low-cost subsidiary in El Salvador that was not affected by the bankruptcy.
“Contrary to some irresponsible statements made by others in the media, I would like to categorically state that we have not and we will not send any work to Aeroman, the San-salvadorbased sister company of Aveos – not under any circumstance.”
Rovinescu said that Air Canada would “encourage” foreign firms to establish a presence in Canada and hire some of the fired Aveos employees – firms with which Air Canada could then potentially do business with.
The carrier will “probably retake certain internal functions.” He did not say which functions or how many employees could be hired. The airline has boosted its line maintenance employees who do routine, everyday upkeep to 2,400, he said, a 35-per-cent increase since 2007.
He promised to give priority to Canadian firms when deciding on a new supplier. But at other times, he emphasized the global reach and highly competitive nature of the MRO industry, pointing to financial restructuring at American Airlines, United Airlines, Continental Airlines – twice – and US Airways, also twice. The industry is largely moving offshore, especially to low-cost developing countries, but also to non-union operators like Trois Rivières’ Premier Aviation. Air Canada has already said it will switch some work to Premier Aviation, which sprouted out of nowhere recently to become a major player in Canada’s MRO industry.
To a question accusing Air Canada of off-loading unionized workers and hiring Premier Aviation, Rovinescu replied “I don’t buy that comment.”
Aveos, he said, had squandered $975 million over five years before going bust.
“You have to wonder, scratch your head a little bit, if somebody would invest $975 million and flush it down the toilet, to be able to achieve that objective (bankruptcy). Somebody other than the so- called beneficiaries of that strategy.”
In one sharp back-andforth, Rovinescu upbraided Liberal MP Denis Coderre, telling him bluntly to “ask your question properly.” To which Coderre hotly rejoined that he is a 15-year MP and that he was the one asking the question – referring to Rovinescu as “the $5-million man,” a reference to a “retention bonus” the executive recently received. Rovinescu later got his own back, saying he couldn’t answer a political question, unlike members present, because he had not chosen politics as a vocation “whether in federal or municipal politics” – a veiled reference to Coderre’s purported interest in running for mayor of Montreal.
Air Canada has also had “very early conversations” with MROS like GE, MTU in British Columbia and Lufthansa Technik.
Some Aveos “business units are absolutely capable of being resurrected through different ownership by some more powerful strategic players, but not necessarily the whole.”