Aeroplan deal delay buffets Air Canada shares MONTREAL (Reuters) =97 Shares of Air Canada fell as much as 14 % Wednesday= as=20 Onex Corp. delayed its C$245 million ($165 million) purchase of a 35 %=20 stake in the airline's frequent flyer points program Aeroplan. Air Canada=20 shares fell 39 Canadian cents to a new 52-week low of C$2.40 on the Toronto= =20 Stock Exchange before recovering to C$2.65, down 14 Canadian cents. The=20 shares hit a record low in October 2001, slumping to C$1.64 in the=20 aftermath of the Sept. 11 hijacked airliner attacks against the United=20 States. Onex shares were unchanged at C$13.50. Air Canada stock has fallen= =20 25 % since mid-February in reaction to the airline's C$364 million=20 fourth-quarter loss, a credit rating cut, and the slow pace of talks with= =20 unions on cutting labor costs by C$650 million or 23 %. The company has set= =20 a March 15 deadline for unions representing 85 % of its work force of=20 40,000 to come up with contract concession proposals. The airline is struggling with a slumping domestic air travel market and=20 fierce fare discounting by rivals such as WestJet Airlines Ltd. and closely= =20 held Jetsgo. Air Canada February traffic figures showed a 7.9 % drop in=20 passenger traffic from a year earlier and a 3.1 percentage point decline to= =20 73.7 % in its load factor =97 the average number of seats sold as a=20 proportion of those available on flights. And the Montreal-based airline is= =20 burning through its C$585 million of cash at the rate of about C$150=20 million in the first quarter alone, according to analysts. "All the arrows= =20 seem to be pointing in the wrong direction," said Nadi Tadros, analyst at=20 Desjardins Securities. Air Canada said on Tuesday it had agreed to=20 Toronto-based conglomerate Onex's request to extend the deadline on the=20 Aeroplan transaction to April 30. Air Canada, the dominant airline in Canada and world No. 11, said Onex=20 needs time to complete its due diligence, examining the financial records=20 at the airline and Aeroplan. The stake sale, announced on Jan. 27, had been= =20 slated to close by the end of the first quarter. The transaction price,=20 which could rise to C$350 million depending on Aeroplan's profitability,=20 valued all of Aeroplan at C$900 million. Air Canada had expected to record= =20 a big gain on the Aeroplan transaction in the first quarter and use the=20 funds to shore up its cash reserves. Air Canada was scheduled to meet=20 Wednesday with the union representing its 3,400 pilots to discuss=20 concessions, including the airline's demand for a temporary 15 % wage cut.= =20 The pilots' union hired the Toronto unit of Kroll Inc. to conduct due=20 diligence of Air Canada's books. Other unions representing Air Canada's=20 8,500 cabin crew personnel, machinists and ground services workers have=20 said they oppose layoffs. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.tha.gov.tt/ TnT Webdirectory: http://search.co.tt *********************************************************