A leading Lower Mainland aerospace company said Monday that production work for one of its key clients is heading out the door.
In a release, Avcorp Industries Inc. (TSX:AVP) said production work for Cessna Aircraft Co. will move back into the hands of Cessna.
In addition to Boeing Co. and Bombardier Inc., Cessna is one of the Delta company’s three major customers.
Cessna accounted for nearly 40% Avcorp’s business in the third quarter of 2010, its largest client for that period.
Avcorp specializes in airframe structures, and its main source of revenue from Cessna stems from components for that company’s Citation business jets.
Avcorp said it would continue fulfill orders for Cessna until the production transition is complete.
The company has not revealed a timeline for the transition, but said both it and Cessna would enter discussions “with respect to the timing and associated expenses.”
Avcorp added a remuneration agreement is part of the discussion.
Meantime, the company said its current workflow and other new business opportunities would provide “sustainable business.”
Business in Vancouver last caught up with Avcorp in July when the company landed a contract to build outboard wing assemblies for the U.S. Navy’s F-35 carrier variant fighter jet. (See “Avcorp lands significant fighter jet wing assembly contract” – BIV Business Today, July 21.)
The company employs 500 people and holds 354,000 square feet of facilities in Delta and Burlington, Ontario.
At press time, Avcorp’s shares were down 7.14% to $0.06.