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Air Canada Provides Update On Maintenance Arrangements Following Aveos Closure

Air Canada (AC_A.TO, AC_B.TO) provided update on the expected impact related to Aveos Fleet Performance Inc.'s filing for creditor protection under the Companies' Creditors Arrangelment Act on its first quarter 2012 results and progress on transitional and long-term arrangements following Aveos's cessation of operations.

Aveos was a separate and independently owned and managed supplier to Air Canada that provided aircraft, engine and component maintenance services to airlines, including Air Canada.

The airline's first quarter 2012 results will include charges totalling $120 million relating to Aveos.

First quarter 2012 EBITDAR is expected to range between $170 million and $180 million , which is higher than analysts' consensus estimates.

Following the closure of Aveos, on a transitional basis, Air Canada said it has identified qualified and government-approved alternate suppliers of aircraft maintenance to undertake work that was originally scheduled to be performed by Aveos.

In addition to aircraft maintenance, Air Canada requires alternate solutions for its engines and aircraft components maintenance as well as the provision of various maintenance support services.

Air Canada said it is already working with a network of approximately forty Canadian suppliers as well as additional international suppliers and this network will continue to grow over the coming months.

The airline has been undertaking a Request For Proposal process with respect to longer term maintenance work previously performed by Aveos.

by RTTNews Staff Writer

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