Redundancies expected at Chinese-owned airline manufacturer

Some employees at AVIC Cabin Systems have been told they could lose their job as the firm struggles from the effects of the pandemic. 

In a letter handed to employees at risk of redundancy and seen by the Echo, chief financial officer Mark Stoddart warned there is a “forecasted reduction in workload” from next year. 

He also blamed “large site running costs” as another reason for the need for job losses at the Chinese-owned firm. 

AIM Altitude, bought by AVIC Cabin Systems

But it’s also expected the manufacturer of fixtures for aircraft interiors could be closing its Aviation Business Park site in the near future. 

Mr Stoddart wrote: “The company has taken steps to try to avoid this scenario, including bidding for new high-volume contracts, operational improvement interventions, reduction of overtime and contract staff. 

“However, regrettably the situation remains uncertain unless new high-volume contracts are secured in the near term.” 

Read more: Aim Altitude liquidation: creditors should get some money

Employees will now go through a consultation process, expected to last 45 days, before they learn their fate. 

The letter added in two years' time, the Hurn-based factory will “cease manufacturing whilst engineering and support functions will be relocated to smaller premises nearby”. 

Meanwhile employees on both the safe list and those at risk of redundancy have told the Echo of concerns around “transparency” from their bosses. 

Some said there has been speculation AVIC Cabin Systems is looking to move its manufacturing to China. 

The Echo asked the company if it can confirm whether or not all manufacturing will eventually move to China. A spokesperson for the company did not respond to this. 

Responding to questions from the Echo, the spokesperson said the company has “continued to make an operating loss since Covid” and despite taking action, workers will need to be let off “if we are to achieve a sustainable business for the future”. 

The spokesperson added: “The coronavirus pandemic created unprecedented and major challenges for the airline industry.  

“There has been a recovery in the profitability of many airlines since that event which has driven increased demand for new aircraft, particularly narrow-body platforms.  

“However, demand for the company's products, focused on wide-body platforms, has remained subdued as reflected in the current order book.  

“This will look at the options available, including potential redundancies, aerospace market opportunities and relocating certain functions to smaller premises in Bournemouth. 

“The actions proposed are being taken with deep regret but are essential to secure the company's long-term future in the aerospace industry, enabling the company to continue to offer the highest levels of quality, service and innovation to its airline customers and OEM partners.” 

AVIC Cabin Systems has other bases in Cambridge and Auckland, New Zealand. The former has been “strengthened” and in New Zealand nothing has changed, according to the letter. 

It’s not clear how many people AVIC Cabin Systems is expecting to make redundant. The Echo has asked the company for a number. 

AVIC Cabin Systems bought out its sister company Aim Altitude for £2m recently after administrators were called in during the summer of 2022. 

Aim Altitude UK Ltd and its parent company Aim Altitude Ltd posted a loss of £162million loss in 2020 and a £39.4m loss the year before. 

The sale led to some MPs at the time, including former Conservative leader Sir Iain Duncan Smith, calling on the government to review the involvement of the Chinese government in the companies.