Air Canada rolling tits up.

[rafterman]

Ha ha ha.

Just speculation but given their debt load, pension shortfall, economic downturn AC could file for the second time in five years.

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CEO Resignation Triggers Air Canada Bankruptcy Speculation

MARCH 31, 2009 -- Air Canada president and CEO Montie Brewer on April 1 plans to leave the airline, following a surprise resignation on Monday that spurred aviation analysts to warn about the carrier's potential spiral into bankruptcy.

Succeeding Brewer is Calin Rovinescu, who oversaw the airline's 18-month bankruptcy reorganization that began in 2003, then left to form Canadian investment bank Genuity Capital Markets.

The change in leadership "signals bankruptcy protection," said Research Capital aviation analyst Jacques Kavafian in a research note today, adding that Rovinescu's appointment "only makes sense" in that context.

Kavafian noted, "We believe that Air Canada may be in breach of its debt covenants, particularly the requirement of maintaining a minimum of $900 million in cash at the end of each month."

Raymond James analyst Ben Cherniavsky in a research note issued today said Rovinescu "is not a traditional airline guy, which we think works to Air Canada's advantage given its current challenges."

Cherniavsky in the note said the move to "suddenly and dramatically bringing in someone like Mr. Rovinescu—and (presumably) forcing out Montie Brewer—speaks to the extreme turmoil currently taking place at Air Canada."

"At this point," Cherniavsky noted, "we do not believe that this change does enough to materially increase the odds of Air Canada_s survival, which we pegged at 50/50, at best."

During his previous tenure at Air Canada, which ended in 2004, Rovinescu headed up corporate development and strategy, migrating in 2003 to chief restructuring officer during the carrier's bankruptcy reorganization. Cherniavsky said Rovinescu "was a key figure in the company's successful emergence."

Rovinescu assumes Brewer's seat on the company's board. Air Canada chairman David Richardson in a statement on Monday said, "Calin's reputation as a proven leader and his wealth of experience in corporate strategy will serve Air Canada well during this particularly challenging period for the world's airline industry."

As co-founder and principal of Genuity Capital Markets, Rovinescu "has led several M&A, restructuring and financing transactions," Air Canada noted in a statement.

Meanwhile, Richardson said during Brewer's tenure, "The airline has become recognized as an innovation leader and has significantly improved its product offering."

Under Brewer's leadership, Air Canada developed new pricing models—including a focus on flight passes for the corporate market (BTNonline, Oct. 23, 2006)—shunned full content in the global distribution system, citing limitations through the channel and opened the floodgates on unbundling and ancillary revenue initiatives (BTNonline, Nov. 6, 2006).

Business Travel News named Brewer among the Top 25 Most Influential Executives of 2006 for guiding the carrier through such initiatives (BTNonline, Jan. 22, 2007).

 

[Incall]

gee I have a lot of aeroplan points so I hope nothing happens. Is it best to book then so at least they may honor the bookings?

 

[enduser1]

I remember years ago when the Government of Canada bailed out Pacific Western/Canadian for the third time, the CEO of Air Canada said, "the way to run an airline in this country is to run it badly and get bailed out."

He also made very clear that if the government of Canada did in fact bail them out he would "take appropriate actions to secure Air Canada's position."

IMHO Air Canada is fulfilling that threat. The bailout five years ago did not allow Air Canada to get rid of all of its debt. This time either Air Canada will be allowed a real bankruptcy or it will be back in bankruptcy court five years later, for bailout number three.

EU

 

[rafterman]

Ha ha ha.

There's the end of the bailout line behind GM & Chrysler.

Will $ five billion be enough?

 

[Keebler Elf]

Air Canada should be government funded. Period.

It's not financially viable to have flights all across Canada but that doesn't mean flights shouldn't take place.

Part of being a country means providing services to everyone, not just to routes that are profitable.

If the company is being mismanaged, that's one thing. But if it's just a case of profitability, that's something else.

 

[danmand]

I once arrived in Pearson to take a flight to Europe. When I could not find the
flight, I went to Air Canada information, where they cheerfully informed me, that
I had been re-booked on the flight leaving THE DAY BEFORE.

 

[5hummer]

They're probably comparatively in better shape than their American counterparts.

 

[mac]

They're probably comparatively in better shape than their American counterparts.

as is their service. I'm not sure how many airlines are going to survive this recession...this just isn't a bad air canada issue.....it's a business is way down because the economy is crumbling issue.

 

[fuji]

Air Canada should be government funded. Period.

Maybe there should instead be specific government subsidies available to any carrier for routes that are nationally important but otherwise unprofitable.

 

[danmand]

Air Canada should be government funded. Period.

It's not financially viable to have flights all across Canada but that doesn't mean flights shouldn't take place.

Part of being a country means providing services to everyone, not just to routes that are profitable.

If the company is being mismanaged, that's one thing. But if it's just a case of profitability, that's something else.

Westjet is adding routes.

 

[stang]

It's still my fav North American airline.

 

[yaya17]

It's still my fav North American airline.

Then you must not fly a lot.

 

[El_Cid]

early April fools is my guess.

 

[Ross Eyerie]

Soooo like does anyone have any speculation as to what happens to people who have bought tix and AC goes belly up?

 

[Rockslinger]

what happens to people who have bought tix and AC goes belly up?

Always always buy your tickets with a reputable credit card. That way there is hope that the credit card company will make you partially or completely whole.

 

[Cycleguy007]

Everyone is looking for a bailout package these days... Why shouldn't THEY join the line!

I say Fuckem! Fuckem all and let the consumer decide who they will support.

As always... just my nickels worth.

 

[red]

I once arrived in Pearson to take a flight to Europe. When I could not find the
flight, I went to Air Canada information, where they cheerfully informed me, that
I had been re-booked on the flight leaving THE DAY BEFORE.

so it was your fault

 

[Rockslinger]

Everyone is looking for a bailout package these days... Why shouldn't THEY join the line!

It will be a truly sad day if the ladies from the escort or MP industry ever need a bailout. Then you know the economy is really in the sewer.

 

[viking1965]

Maybe there should instead be specific government subsidies available to any carrier for routes that are nationally important but otherwise unprofitable.

Certainly a more equitable approach.

But then the politics will merely be shifted to which "routes" (cities) get subsidized vs. which carrier.

 

[viking1965]

Do you really think a country would be left without a "National Airline"?

Why not? What's the value of a "National Airline"?