Tuesday, 1 April 2008

AeroMechanical Flies On Minus Its Earliest Partner

AeroMechanical Services Ltd. (TSX:V-AMA)

Basic shares: 92.5 million

It was a sad, but not financially crippling time at AeroMechanical with the demise of one of its earliest customers - Aloha Airlines out of Hawaii.

Aloha announced it was filing for Chapter 11 bankruptcy protection in the United States and subsequently, that it was ceasing its passenger operations.

However, it is keeping alive its more lucrative cargo and special operations business so AeroMechanical (AMA) should continue to enjoy revenue, albeit at a reduced level.

AMA said in a April 1st news release that for the 2007 fiscal year, gross revenue invoiced to this old and faithful customer amounted to just nine per cent of AMA's cash-based revenue.

AeroMechanical CEO Bill Tempany said one of the reasons Aloha revenue was such a small piece of the AMA pie was because Aloha was its first major customer so it got a discounted deal compared to current contracts.

"Aloha has been a great partner during out four-year relationship," Mr. Tempany said. "We continue to appreciate the support of Aloha."

To read the full press release, please click here.