Air Canada plans to buy up to 105 regional jets MONTREAL (Reuters) =97 Air Canada said Thursday it hopes to raise C$4= billion=20 ($3 billion U.S.) in aircraft financing to buy up to 105 new regional jets= =20 as part of its plan to restructure as a low-cost carrier. Air Canada, the=20 country's largest airline and world No. 11, also said it is seeking to cut= =20 by half its current aircraft lease costs. The company said it started=20 negotiations with all its lessors to get a reduction of C$720 million on=20 its annual lease bill of C$1.4 billion. The break on the lease payments=20 would add to the C$1.1 billion in labor cost cuts the airline is trying to= =20 win from its 40,000 employees before emerging from bankruptcy protection. The court-appointed monitor, Ernst & Young, said in a report Thursday that= =20 Air Canada had reached an agreement with only one lessor so far. Air=20 Canada, which is losing C$5 million a day, suspended all lease payments=20 after getting creditor protection on April 1. The company said it will=20 resume payments at a revised rate if all negotiations with lessors are=20 completed by June 30. The monitor said the airline had about C$468 million= =20 in cash on hand at the end of May, roughly C$376 million less than what it= =20 needs to meet its obligations. Air Canada had revenues of about C$1.37=20 billion in April and May, 23% less than in the same period last year as the= =20 SARS outbreak in Asia and Toronto aggravated the slump in travel. REGIONAL SHIFT The addition of new regional jets with up to 110 seats is part of Air=20 Canada's plan to transform itself from a full-service carrier to a low-cost= =20 operator with a simplified fare structure. Regional jets became popular in= =20 the airline industry over the last decade because they are cheaper to=20 operate, more full efficient, yet comfortable for passengers seeking rapid= =20 point-to-point travel that bypasses the often congested major hubs. The=20 airline's fleet currently includes only 35 of Bombardier Inc.'s 50-seat=20 Canadair Regional Jets, of which 10 are flown by its regional affiliate=20 Jazz. Air Canada chief executive Robert Milton has also sparked a battle=20 with the main line pilots because the company wants to transfer short-haul= =20 flights to its Jazz unit, where the pilots, represented by a separate=20 union, are paid roughly half the salary. Air Canada also said it will asked= =20 for a three-month extension to its court protection, which is currently set= =20 to end on June 30. The company said it plans to raise about C$1.35 billion= =20 through new equity and debt to finance operations once it emerges from=20 bankruptcy protection. It also said it will try to convert some C$4.3=20 billion of unsecured debt into new equity in the restructured airline. It=20 has admitted this debt for equity swap would essentially wipe out its=20 current share value. Air Canada stock continued to defy expectations on=20 Thursday, closing up 4 Canadian cents at C$1.29 on the Toronto Stock= Exchange. *************************************************** 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.carib-link.net/naparima/naps.html TnT Webdirectory: http://search.co.tt *********************************************************