Canada 3000 hopes to fly again

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Canada 3000 hopes to fly again
WebPosted Fri Jan 4 07:42:12 2002
TORONTO - Just over a month after going bankrupt, Canada 3000 is putting=20
the finishing touches on a plan it hopes will get some of its aircraft off=
=20
the ground again.  Investors are expected to vote on the proposal at a=20
meeting next week.
The airline, which grounded its jets in November, has been talking to=20
unions and creditors about reviving some of its service by the end of=20
May.  If the plan is approved, about 10 of the bankrupt company's three=20
dozen jets would return to service, according to reports. The Airbus A320s=
=20
would fly to Europe during the summer months, and warm vacation spots=20
during the winter.  The company's former president Angus Kinnear says=20
Canada 3000 could succeed because old customers have been urging the=20
carrier to get back in business.  "I don't believe the public blames Canada=
=20
3000 for what happened Sept. 11. It was a situation, that we got caught in=
=20
the downdraft," Kinnear said Thursday.  "Although we managed to keep going=
=20
for two months, there's a limit as to how far you can continue if you've=20
lost a third of the business because people have stopped travelling," he=20
said. "But people continually phone and ask us to get back into the air."

Canada 3000 calls for market regulation
Some analysts doubt the venture would be profitable, especially given the=20
tough competition in the airline business.
Kinnear admits they are worried about Air Canada's new low-cost carrier=20
Tango. "We are obviously concerned about the very large, dominant position=
=20
which Air Canada has in the marketplace."  He says Ottawa could help by=20
cutting Air Canada's dominance of the domestic market down from 80 per cent=
=20
to 70 per cent.  Airline analyst Fred Lazar says that move would be a=20
mistake. "This would be regulation of the indistry of the worst kind. To=20
say OK, each carrier has a certain share of the market basically means=20
there's not going to be any competition."  If investors do approve Canada=20
3000's plan, it's believed that some of the workers who lost jobs may be=20
rehired. But union officials have said talks are still at a preliminary=20
stage. It's not clear if the trimmed down airline would call itself Canada=
=20
3000 =96 a brand name that some think would help attract passengers.  Right=
=20
now, Canada 3000's assets are being looked after by the court-appointed=20
receiver Deloitte & Touche.  The airline went bankrupt for several reasons=
=20
according to analysts. It lost a lot of revenue when many people stopped=20
flying after the Sept. 11 terrorist attacks in the United States. Canada=20
3000 was also having trouble making money on two recently acquired rivals,=
=20
Royal and CanJet.

Written by CBC News Online staff




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