RESULTS: FLS Aerospace, which includes the former TEAM Aer Lingus maintenance business in Dublin, has reported a loss for 2001 after a tough fourth quarter.
Despite posting profits in the first three quarters of last year, the group reported a loss before interest and tax of 116 million Danish krone (€15.6 million) for 2001 compared with a Dkr375 million loss a year earlier. In the fourth quarter, it lost more than Dkr122 million.
It had hoped to benefit from the impact of a turnaround plan last year but the attacks in the US quickly reduced the volume of activity and led to lower prices.
"Since September 11th, the industry has been experiencing a significant reduction in demand for aircraft maintenance as aircraft are grounded and airlines reduce the frequency of flights," FLS said.
Turnover last year fell to Dkr3.05 billion from Dkr3.3 billion in 2000, while the company was hit by a once-off cost of Dkr300 million to cover redundancies, writedowns and lost work due to cancellations.
The company announced plans to reduce its workforce. Up to 25 per cent of its 3,600 employees are to go. Around 200 jobs - 150 in aircraft overhaul and 50 in group support functions - are due to be lost at its Irish operation.
An FLS spokeswoman in Dublin said the restructuring process was still going on and a clearer picture should emerge toward the end of the month.
But she said around 100 workers had already agreed to leave the company. Around 11 have agreed to take unpaid leave, 41 have been shed through natural attrition and 49 have opted to take early retirement.
FLS also hopes to reach agreement with Sikorsky Helicopters to convert aircraft for cargo use, which would lead to the creation of 50 jobs.
Sikorsky offered to place the business, worth €159 million, with FLS if it won a contract to supply up to five helicopters to the Air Corps.
However, the Government's agreement with Sikorsky has been put on hold following a legal challenge to the terms under which the €60 million contract was awarded.
As a result, FLS is still waiting to finalise terms with Sikorsky, although it had hoped some of the work might come on board late this year or early next year.
The spokeswoman said FLS was aggressively pursuing opportunities but admitted the outlook for next year was "very unpredictable".
Meanwhile, plans by the company's Danish parent, FLS Industries, to sell the aerospace division have been put on the backburner while the industry focuses on surviving the downturn in the sector.
"They envisage a sale in a six to 24-month period. It's more that kind of timing than immediately," the spokeswoman said.
A plan by United Technologies to buy the company collapsed amid the chaos caused in the aviation industry following the terrorist attacks on the US.
