Doubts over Leighton aviation firm's future

Leighton Holdings' John Holland Aviation Services may be put up for sale or closed as the loss-making division reels from the loss of three big contracts.

Accounts filed with the corporate regulator show JHAS reported a $7.13 million operating loss in the 2012 calendar year based on $78.86 million of revenue and costs of $85.99 million.

Since July, JHAS has lost large heavy maintenance contracts with Virgin Australia, Jetstar and Tigerair Australia.

The Virgin work went overseas, the Jetstar work in-house and Tigerair helped launch BAE's commercial heavy maintenance business in Australia.

A John Holland spokeswoman said the company was "not looking to provide any updates" on the Melbourne-based business amid speculation about its future in the aviation industry.

Moelis analyst Simon Fitzgerald said he would not be surprised if Leighton tried to sell the business.

"I would think Leighton are looking at any assets that are non-core and looking at what they can get for them," he said.

"[JHAS] is something that is not generally well talked about or flagged. Somebody else may be able to get a better return from it."

JHAS was formed in 2007 when John Holland acquired the former Ansett Aviation Engineering Services for $10 million. The business had annual revenues of $30 million at the time.

Australian Licensed Aircraft Engineers Association federal secretary Steve Purvinas said JHAS has tried its hardest to make the most of the ex-Ansett facility at Melbourne Airport.

"They are being squeezed by the two major carriers who are trying to get them to do things cheaper by the day," Mr Purvinas said. "Now John Holland are essentially trying to survive on small pieces of work they are getting from carriers out of other terminals."

He said JHAS had been struggling for the "last three or four years".

There was industry speculation that John Holland had considered selling the division, he said.