Interesting scenario Air Canada is in.
- Pension liabilities still remain significant
- Labour costs are still high
- Organization looking to obtain 35% of the company for $650M walks away
- GE Capital indicates they won't ante-up any more
- Competitive pressure is continuing to mount
- Government will not put up cash
- Court has indicated that the leash is short on the time remaining for
creditor protection
Throwing in the towel, while probably the best option, would land the
entire executive in breach of their fiduciary duties.
So we get to watch them flounder like a fish out of water.
What are the options?
1) Dramatic labour reforms & concessions but path forward remains the
same
2) Orderly Liquidation
a) Major assets acquired by WestJet/Jetsgo and other operators. Major
operations changes.
b) Major assets acquired by a NewCo, operations virtually unchanged.
c) Assets scattered, Canadian government permits cabotage and foreign
carriers to cover international routes until Canadian airline reapplies
for routes.
What could happen?
Matthew