Doubts over Leighton aviation firm's future
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.
Frequently Asked Questions about this Article…
John Holland Aviation Services, a division of Leighton Holdings, is facing potential sale or closure due to significant financial losses and the loss of major contracts.
John Holland Aviation Services reported a $7.13 million operating loss in 2012, primarily due to losing three major heavy maintenance contracts with Virgin Australia, Jetstar, and Tigerair Australia.
John Holland Aviation Services lost heavy maintenance contracts with Virgin Australia, Jetstar, and Tigerair Australia, which significantly impacted their revenue.
Yes, there is speculation that Leighton Holdings might consider selling John Holland Aviation Services as it is a non-core asset and has been struggling financially.
The loss of contracts led to a significant decrease in revenue for John Holland Aviation Services, contributing to their operating loss and raising doubts about their future.
John Holland Aviation Services is facing challenges from major carriers demanding cheaper services and is struggling to survive on smaller contracts from other terminals.
John Holland Aviation Services was formed in 2007 when John Holland acquired the former Ansett Aviation Engineering Services for $10 million, initially generating $30 million in annual revenue.
Industry experts, like Moelis analyst Simon Fitzgerald, suggest that Leighton Holdings might sell John Holland Aviation Services, as someone else might achieve better returns from the business.
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