Air Canada Makes Bankruptcy Filing

Air Canada Makes Bankruptcy Filing :

Air Canada confirmed Tuesday that is has filed for bankruptcy protection as it struggles with huge debts and falling revenues.

The airline said it would continue flying while it reorganizes and has arranged up to CAD$1.5 billion (USD$700 million) in financing to keep its planes in the air.

Job losses are inevitable among the 30,000 work force at the world’s eleventh largest carrier which has been unsuccessfully trying to win concession from its unions.

Last year, Air Canada posted losses of CAD$428 million and it has well over CAD$12 billion in debts and leases.

In a statement, the airline said the reorganization would allow it to emerge as a leaner, more efficient, lower cost airline through savings obtained mainly from aircraft lessors, lenders, bondholders and labor groups.

“Clearly, while not our preferred course of action, a CCAA filing is necessary to allow Air Canada to make the required changes to compete effectively and profitably in a changed environment,” said Robert Milton, President and Chief Executive Officer.

“Air Canada’s customers around the world can continue booking with confidence that their travel plans will not be disrupted. It has been repeatedly demonstrated that the action we have taken today to restructure will not create a disruption to service nor should it impact in any way our commitment to safety and customer service.”

The company said that it had stopped the arrangement to sell 35 percent of its Aeroplan frequent flyer program but had given the buyer, Onex. a month to try and reach a new deal.
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link: http://news.airwise.com/display/story.html?name=2003/04/1049282822.html