Air Canada and travellers say it's business as usual; trading of stock halted DAVID PADDON Canadian Press Friday, May 30, 2003 TORONTO (CP) - With an Ontario court expected to hear Friday afternoon whether Air Canada and its pilots have reached a critical cost-cutting deal, the Toronto Stock Exchange halted trading of the airline's shares. The company insisted it was business as usual, and travellers and travel agencies seemed to retain faith that the airline will resolve its labour problems and survive its financial troubles. "Surprisingly, we've had very little concern," Lesley Paull, owner of Paull Travel in Edmonton, said Friday. "I believe that everybody almost feels that somehow this is going to be rectified, including me," Paull said. "We all know we need Air Canada, and it's got to be resolved somehow." The TSX halted trading of Air Canada stock early Friday afternoon. Trading halts are common when a company is expected to release important news that may affect the value of shares. Air Canada shares (TSX:AC) last traded at $1.67, down eight cents with more than five million shares exchanged Friday. An Air Canada spokeswoman, Laura Cooke, said she had not been advised an announcement was imminent but noted Justice James Farley of Ontario Superior Court was due to receive an update about 2:30 p.m. EDT. IN the meantime, "it's business as usual," said another airline spokeswoman, Isabelle Arthur. "It's very understandable that customers are worried," she added. But Arthur said "we have reached agreements with all of our unions except for the pilots and we're hopeful discussions will be successful and allow us to restructure our labour cost as necessary." Representatives of the pilots union, meeting in secret in Toronto, could not be reached for comment. Air Canada has been losing an estimated $5 million a day since entering protection from creditors April 1. Air Canada lawyer Peter Osborne said the position of the airline's board, which held an emergency meeting after the main pilot union failed to come to a cost-cutting agreement, will be stated to the court at about 2:30 p.m. A court-appointed monitor's report Thursday said the lack of a deal with the pilots threatened to undermine tentative cost-reduction accords with the company's eight other unions. The monitor also said Air Canada doesn't have enough cash to cover more than half of the financial obligations it has amassed since obtaining court protection. But the airline refuses to tap debtor-in-possession financing it has arranged, estimated to be worth $1 billion, "unless a labour-cost realignment is achieved to halt such losses," the monitor's report said. The 3,100-member pilots union was said to have been asked to accept more than 800 job cuts, a 15 per cent wage reduction and other concessions, to save Air Canada $250 million annually. The pilots association is the only one of nine Air Canada unions not to have reached a deal. The monitor's report said the concessions of the other unions and non-union employees, worth a total of $766 million a year, could be undone if ACPA and Air Canada don't land an agreement with the pilots. While a lawyer for the pilots complained of an inequitable burden in the proposed reductions, Octagon Capital airline analyst Jacques Kavafian noted that they are the highest-paid labour group and "it's easier if you make $175,000 a year to take a 20 per cent pay cut than if you make $40,000." *************************************************** 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/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.caribbeanfloral.com TnT Webdirectory: http://search.co.tt *********************************************************