Air Canada to Convert Air Canada Technical Services Into Wholly-Owned
Subsidiary
MONTREAL, July 5 /CNW/ - Air Canada today announced that it has created a
separate company for its Air Canada Technical Services Division to facilitate
its transition as a separate profit centre. This initiative will allow Air
Canada to improve efficiencies through increased scale and grow the business
while maintaining a safe and reliable maintenance, repair and overhaul (MRO)
operation for airline customers worldwide.
"Air Canada Technical Services has become a separate corporate entity,
consistent with our strategy to create new profit centres within the
Corporation to illuminate shareholder value and increase the focus on certain
ancillary profitable operations of the Corporation," said Calin Rovinescu,
Executive Vice President, Corporate Development and Strategy. "With this
objective in mind, we are currently developing the business model to allow for
a transfer of assets planned by the end of 2002. At this stage, no decision
has been made with respect to the sale of any part in Air Canada Technical
Services."
"The mandate of Air Canada Technical Services is to fully develop its
potential and realize its true value as an international leader in providing
maintenance repair and overhaul services not only to Air Canada but also to
other airlines around the world," said Robin Wohnsigl, President, Air Canada
Technical Services. "The positioning of Air Canada Technical Services as a
stand alone MRO business provides the focus required to create a company that
can compete for its portion of the global aviation maintenance business
estimated to represent USD $40 billion in annual revenues."
Air Canada Technical Services experienced 12 per cent growth 2000-2001
and plans to significantly increase its third party work over the next three
years. Revenue from third party work represented more than CAD $200 million in
2001 and currently represents approximately 25 per cent of its activities, in
addition to work performed for Air Canada. Air Canada Technical Services
currently supplies services to more than 60 airlines around the world.
Growth will be pursued through direct sales as well as joint ventures
with other companies. Two recent agreements for third party work include
components and heavy maintenance for Atlantic Coast Airlines and engine repair
for Lufthansa German Airlines, together valued at more than USD $200 million
over the next five years.
In addition, Air Canada Technical Services will continue to exploit
business opportunities such as Aeroxchange for e-procurement, and joint
ventures including AirLiance for surplus materials management and ACETEK
Composites for parts repair. Using its expertise developed in Canadair
Regional Jet maintenance, Air Canada Technical Services has expanded into the
CF34 Regional Jet engine maintenance business at its Montreal facilities. In
addition, heavy maintenance facilities in Calgary, previously owned by the
airline's regional subsidiary, Air Canada Jazz, were acquired to complement
its other facilities located coast to coast.
Air Canada has made significant investments in its technical services
operations over the years. Most recently, to consolidate the competitive
leadership position of Air Canada Technical Services, investments of CAD
$20 million were made for for a fixed wide body heavy maintenance docking
station in addition to over CAD $10 million in improvements to aircraft
component and engine maintenance facilities, both at its Montreal maintenance
base. Air Canada Technical Services has also invested in SINEX, a state-of-the-
art automated aircraft heavy maintenance system for check planning and
management.
Air Canada Technical Services provides maintenance, engineering, repair,
supply and purchasing to support Air Canada's mainline fleet of more than 220
aircraft, as well as other airline customers, in five maintenance categories:
airframes, engines, components, line and aircraft cabins. It also provides
material and supply chain management services to the airline industry. Air
Canada Technical Services employs approximately 8000 staff in Canada, the U.S.
and Europe, with six major maintenance base centers located across Canada: in
Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver.
CAUTION CONCERNING FORWARD-LOOKING INFORMATION:
Certain statements made in this press release are of a forward-looking
nature and are subject to important risks and uncertainties. The results
indicated in these statements may differ materially from actual results for a
number of reasons, including without limitation, terrorist attacks, war,
general industry, market and economic conditions, the ability to reduce
operating costs and employee counts, employment relations, labour
negotiations, energy prices, currency exchange and interest rates, changes in
laws, adverse regulatory developments or proceedings and pending litigation.
The forward-looking statements contained in this press release represent Air
Canada's expectations as of July 5, 2002, and are subject to change after such
date. However, Air Canada disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new information,
future events or otherwise.
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