GippsAero will cease production of the Airvan 8 sometime between now and 20 September, according to a statement sent to Australian Flying today.
Mahindra Aerospace CEO Keith Douglas said that the workforce would be pared back to minimum and the company reduced to maintaining the existing fleet only.
"GippsAero plans to restructure the company to a Spares and Support Organisation by the end of 20 September," Douglas said.
"The general aviation utility aircraft market over the first six months of the year has seen an approximately 70% reduction in the number of aircraft sold and aviation market forecasts indicate it may take three years before volumes return to pre-Covid-19 levels.
"As a result, approximately 45 positions [at GippsAero] will be made redundant.
"The restructured company will continue to provide spare parts, technical and maintenance support to our existing fleet, as well as retaining some production and engineering capability."
After the staff reductions, GippsAero will retain only 13 employees, well down on the 88 it started the year with.
Although the company has attributed the cuts to the impact of COVID-19, only one Airvan 8 was delivered in the six months from October 2019 to March 2020, well before the worst of the pandemic was felt.
Industry sources continue to insist that Mahindra Aerospace has GippsAero on the market, but has yet to find a buyer despite a lot of interest because the company has been over-valued and the order books were closed some time ago to facilitate the end of production.