TORONTO - Trinity Time Investments said Friday it will not go ahead with its proposed $650-million investment in Air Canada ? at least for the time being ? making good on an earlier threat to walk away if unions did not agree to more concessions. CBC ARCHIVES: Losing Altitude: A History of Air Canada INDEPTH: Air Canada Trinity Time said it did not rule out getting involved in Air Canada's restructuring in the future "if circumstances change sufficiently." But its withdrawal raises questions about whether the airline will be able to find another key investor in time to prevent it from being liquidated by creditors who are owed billions of dollars. "We are of course disappointed in this outcome," Trinity director Harold Gordon said in a statement which released Air Canada from its exclusive investment deal with the company. Air Canada, it said, is now free to try to find another key equity investor. Gordon said Air Canada's financial performance was "somewhat weaker" that Trinity Time had expected. "In particular, labour cost and productivity savings promised by Air Canada's unions under Air Canada's collective agreements are not being fully achieved," he said. AIR CANADA ANNUAL RESULTS 2003 $1.87 billion LOSS 2002 $828 million LOSS 2001 $1.25 billion LOSS 2000 $82 million LOSS 1999 $213 million PROFIT Just minutes after the Trinity Time announcement was made public, Air Canada released its 2003 financial results. They showed that the airline had a net loss of $1.87 billion last year. The operating loss, which excludes reorganization and restructuring charges, was $684 million. "Our restructuring has become more challenging as a result of record high fuel prices, increased domestic capacity by our low cost competitors and the geopolitical issues faced by the airline industry as a whole," Air Canada CEO Robert Milton said in the earnings release. But Milton said the airline was "well positioned" to carry on business while it searches for an alternative key investor and said it was business as usual for the airline, its customers and employees. "We trust that our unions and other stakeholders will recognize the urgency of resolving the remaining obstacles to our exit from CCAA [creditor protection]," Milton said. Trinity Time cites labour costs, high fuel prices, price competition Trinity Time, which is headed by Hong Kong-based Victor Li, also blamed high fuel costs for the pullout, and said yields and margins "remain under pressure." "Air Canada's earnings outlook is adverse to our expectations, reflecting among other things a more intense competitive environment generally and a higher level of domestic capacity and competition than expected." FROM Nov. 9, 2003: Air Canada finds major investor But Trinity's Gordon left no doubt that he felt the biggest reason why Trinity Time was not prepared to invest its money at this time was the airline's labour situation. He called this week's signing of a pension deal with the machinists union "a meaningful step" but said it wasn't enough. "Regretfully, this step is not reflective of the positions taken by union leaders representing more than two-thirds of Air Canada's employees," Gordon said. "We have concluded from this that without a change in the manner in which Air Canada's employees are organized and their interests represented, Air Canada will not likely achieve a sufficient fresh start to prosper and grow in the competitive environment which it faces after emerging from CCAA [creditor] protection." The withdrawal of Trinity Time as the lead equity investor in Air Canada throws a wrench into the airline's plans to emerge from creditor protection. That protection expires April 15. Air Canada filed for creditor protection April 1 last year. Written by CBC News Online staff