Aveos: Restructuring Our Canadian Operations

During the past year, we have worked hard to implement important measures that would help us make headway toward becoming a leader in the MRO industry. With new leadership in place we strengthened our organization to better serve our customers, reduced our workforce in response to lower customer demand, reined in expenditures and reviewed costs at every opportunity.

Despite our very best efforts, we continue to feel the effects of a tough economic environment, exacerbated by uncertain work volumes across our business lines from our principal customer. The significant volume of maintenance work that did not materialize during the past few months resulted in the reduction of business volumes, putting in question the viability of our operations. This conduct had a devastating impact on our overall cost structure, one that is no longer sustainable.

Immediate corrective action must be taken to address this situation. Effective March 18, 2012, we have ceased the operation of our Airframe maintenance services. After careful consideration and review of all alternatives, our board of directors determined to voluntarily file for CCAA protection in Canada in the Quebec Superior Court today. This is the only option for the company.

In 2010, our board of directors made a strategic decision to recapitalize the Company in an effort to allow us to strengthen our balance sheet and put Aveos on solid financial footing. The goal was to emerge stronger and better aligned to meet the needs of a changing market. However, given that we have faced reduced, deferred, and cancelled maintenance services despite Aveos' exclusive contracts with our principal customer, we no longer have the capital resources we need to continue to do business.

Aveos has been a Canadian institution with a rich history for more than 75 years. Today's filing is a tragedy on many fronts, but beyond the institution, we recognize the human toll and dislocation this action will cause. We want to sincerely thank all of you, for your exceptional professionalism and dedication to Aveos as we work through these issues.

Sincerely,

Joe Kolshak