The future of FLS Aerospace, which employs 1,500 at Dublin Airport, was thrown into further doubt yesterday as its Danish parent gave the strongest indication yet of its determination to sell off the loss-making airline maintenance division.
In its interim results, FLS added to speculation that it is poised to sell the aerospace wing to Swiss-based SR Technics.
The company said: "In future, FLS Aerospace will no longer be a core business area within FLS industries. A process is currently ongoing where the future ownership... is being reviewed."
FLS Aerospace posted a €3 million deficit in earnings before interest and tax for the first six months in 2003, compared with a 3.6 million loss for the same period in 2002, the interim figures show. Cash flow from operations fell nearly 6.8 million to 1.8 million.
Group earnings before tax improved markedly to 27 million, compared with a 96.5 million deficit in 2002.
A spokeswoman said the sale of FLS Aerospace was being discussed "with a number of parties" but that it could not comment until a deal was struck.
FLS Aerospace is based in Dublin, Manchester and Stansted. Due to the slump in the airline business, its profits have been eroded recently, with the Irish section producing a pre-tax loss of 1.3 million in 2002.
FLS entered the Republic in December 1998 following its takeover of Team Aer Lingus. Clients include Aer Lingus, Ryanair, Virgin Atlantic and EasyJet.
FLS's resolve to exit the air maintenance sector was underscored earlier this year with the sale of its small air-maintenance operation in Copenhagen.
The last set of accounts filed by FLS Aerospace Ireland, for 2002, show that margins are under pressure.
While turnover of 124 million was produced by the Dublin facility, the cost of sales reduced this figure to an €18 million gross profit.
Further operating expenses and restructuring costs transformed it into a loss of more than 500,000.
In 2001, the Irish company made a 2.1 million provision to reduce the company's workforce. Staff numbers fell in 2002, but this arose because of natural attrition rather than forced redundancies.
The €2.1 million provision was consequently released back into the profit and loss account.
SR Technics was the result of a management buyout (MBO) last year, although much of the finance for the MBO was provided by UK venture capital house 3i.
3i is now expected to play a major part in any acquisition of FLS Aerospace, mainly because SR Technics has also suffered since 2001 because of the slump in the airline business.
