This would be all academic if Milton didn't get his back up to the original ONEX proposal back in August 1999. His life-long ambition (according to Air Monopoly) was to run a major airline, and four days after taking the helm of AIr Canada, Schwartz makes a run at his business. Within moments, everyone knew that it wasn't a merger, and Schwartz friendly executives would be running Air Canada if his bid was to be accepted, and Milton would be back on the street. So, of course they said no. An article in the Vancouver Sun (that bastion of financial reporting ;-) ) noted that in Air Canada's $1.9B 2003 loss, that $685M was an *operating* loss. This is on passenger revenue of $6.8B (down from $8.2B.) For a company that supposedly has been in hard-core cost-cutting mode for well over a year, having ticket revenues down nearly 20% PLUS losing a dollar on every 10 of revenue, this is truly abysmal. Many (not all) of the unions have indicated that they are not making up any more concessions, and were quoted as telling VIctor Li to "go take his money and go back to Hong Kong." Would you invest any money? And if you were going to invest any money, would you invest more or less than you would of a year ago. Rovinescu, who was to receive a $10M 'thank-you' from Li, abruptly resigned, confirming Trinity is out of the picture for good and any new offer would be significantly less enticing. Someone is going to have to write a second edition of Air Monopoly. ;-) Matthew On Apr 6, 2004, at 8:53 PM, Mark Greenwood wrote: > If the rumours are to be believed, Cerberus is waiting in the wings. > There > is also talk of Onex & Texas Pacific making a joint bid. Wouldn't it > be > Robert Milton's worst nightmare to wake up one morning and find out > that > Gerry Schwartz is his new boss. There is also a rumour of a > triumvirate of > the large pension funds making a bid. The Ontario Teachers already own > Worldspan, why not throw an airline into the mix. I wonder how the > pension > funds will handle the pension issue since it seems to be a sticking > point. > > I wouldn't count AC out just yet. > > Mark > > -----Original Message----- > From: The Airline List [mailto:AIRLINE@xxxxxxxxxxxxxxxxx] On Behalf Of > Matthew Montano > Sent: April 6, 2004 8:21 AM > To: AIRLINE@xxxxxxxxxxxxxxxxx > Subject: Air Canada -- Now what? > > > 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 > >