Thank you, Mr. Chairman.
Honourable members, we are pleased to accept this committee's invitation to talk about Air Canada's aircraft maintenance operations.
My name is Louise-Hélène Sénécal and I am assistant general counsel at Air Canada. I have been with Air Canada for nearly 22 years. I am accompanied by Mr. Michel Bissonnette, Senior Director, Engines and Airframe Maintenance, and Joseph Galimberti, Director, Government Relations. Allow me to provide the following by way of background.
Since October 2004, Air Canada no longer operates on its own all of the aircraft maintenance functions it once did. Air Canada's Plan of Compromise and Arrangement under the Companies Creditors' Arrangement Act resulted in Air Canada becoming a wholly-owned subsidiary of ACE Aviation Holdings Inc.
At that time, Air Canada's technical services division, or ACTS as it is also referred to, was spun off as a separate entity owned and controlled by ACE. In effect, the former maintenance division of Air Canada was divided in two. The airframe, engine and component maintenance operations were spun off to ACTS while the line maintenance operations were retained by Air Canada.
The 2004 plan of compromise, which was the basis for Air Canada emerging from insolvency protection and continuing to operate, was implemented following a creditor vote and was sanctioned by the court under the Companies Creditors' Arrangement Act. All of Air Canada's unions, including the IAMAW, the International Association of Machinists and Aerospace Workers, voted in favour of the 2004 plan, which included the spin-off of ACTS.
Since that time, Air Canada itself has gone public and ACE's interest in Air Canada is now reduced to a minority interest. Also, in 2007, ACE sold ACTS to private equity interests. ACE no longer holds any ownership interest in this company.
ACTS changed its name to Aveos in 2008. Air Canada and Aveos are parties to certain services agreements by which Aveos is the exclusive supplier to Air Canada of maintenance services, other than line maintenance, for airframes, engines and components. Aveos operates out of various bases including maintenance bases formerly operated by Air Canada at, among other locations, Montreal, Mississauga—or Toronto—and Winnipeg. Air Canada also operates its own maintenance bases at, among other places, Winnipeg, Toronto and Montreal to perform line maintenance.
In 2009, Air Canada spent a total of $944 million in aircraft maintenance. Of that amount, $659 million, or approximately 70%, was spent on aircraft, engine, component and line maintenance services performed by Aveos or Air Canada at maintenance bases located in Montreal, Mississauga and Winnipeg.
For the first nine months of 2010, Air Canada spent $648 million in aircraft maintenance. Of that amount, $462 million, or approximately 71%, was spent on aircraft, engine, component and line maintenance services performed by Aveos or Air Canada at maintenance bases located in Montreal, Mississauga and Winnipeg.
I would like to conclude this statement by dispelling rumours some of you may have heard regarding maintenance work on Air Canada aircraft which could be outsourced to Aeroman, an airframe maintenance company located in El Salvador and owned by Aveos.
To begin, let me start by saying that Aeroman is not certified to perform maintenance work on Air Canada aircraft, something your colleagues at Transport Canada can readily confirm. More importantly, Air Canada has absolutely no intention of sending any airframe maintenance work to Aeroman, now or in the future.
I would like to complete this by assuring you that Air Canada complies with and will remain compliant with the Air Canada Public Participation Act.
My colleagues and I would be pleased to answer your questions in the official language of your choice.