MONTREAL

Air Canada expects to book $120 million charge related to Aveos shut down

The Canadian Press Published Thursday, April 26, 2012 7:06PM EDT

An Air Canada employee is shown moving baggage on the tarmac at Halifax Stanfield International Airport in Enfield, N.S. on March 8, 2012. (Andrew Vaughan / THE CANADIAN PRESS)

Text:

MONTREAL - Air Canada says it expects first-quarter results to include $120 million in charges related to the shut down of its largest aircraft repair and overhaul provider.

Aveos Fleet Performance Inc. filed for creditor protection last month and laid off more than 2,600 employees across the country when it ceased operations.

Air Canada says preliminary estimates indicate it will book a $65-million non-cash loss on investments resulting from Aveos' 2010 restructuring and a $55-million loss from discontinued operations.

It says first-quarter adjusted earnings are expected to range between $170 million and $180 million.

The Montreal-based airline says it has sent several aircraft to both Canadian and international maintenance providers since the Aveos closure.

For the long-term, it says it will give preference to suppliers that have or will have some portion of operations in Montreal, Winnipeg, Vancouver or Toronto.