Air Canada and AAR Corp. have formalized a deal that will see the carrier’s Airbus narrowbody heavy maintenance work stay at AAR’s Duluth, Minn., overhaul base through late 2017, solidifying the service provider’s plan to open a fourth line at the facility by yearend.
AAR began handling heavy checks on Air Canada’s 89 Airbus A320-family aircraft at Duluth after the closing of Aveos, the carrier’s former primary maintenance provider. AAR and Air Canada have been working under a letter of intent (LOI) since late 2012, starting the work at AAR’s Miami facility and then shifting it to Duluth after AAR started operations at the former Northwest Airlines facility. The formal deal rolls the LOI period into a five-year contract.
AAR’s Duluth operation is dedicated to Air Canada Airbus narrowbody work and runs three lines. AAR recently completed its 100th Airbus heavy check for the carrier, and plans to open a fourth line this fall to boost capacity. AAR employs 305 in Duluth, and an additional line could add as may as 70 jobs, putting the base’s staff close to where it was when Northwest occupied it.
Minnesota funded the base’s construction by selling $47.6 million in bonds in 1995, and Northwest agreed to lease the facility from the Duluth Economic Development Authority (DEDA). In August 2005, Northwest’s mechanics went on strike. A month later, the carrier sought bankruptcy protection and closed the base.
A 2007 deal resolved the outstanding debt and gave DEDA free-and-clear ownership of the facility, but it struggled to land a large tenant.
After a year-long search for a location to expand, AAR in early 2012 stuck a deal with DEDA to set up at the base and landed Air Canada as its launch customer.