Air Canada to restructure


Air Canada has filed for protection from its creditors under Canada’s Companies’ Creditors Arrangement Act (CCAA). Like the US Chapter 11, the CCAA is designed to give bankrupt companies time to restructure so as to return to profitability. The move also includes Air Canada’s subsidiaries, including regional airline Jazz, which operates ten BAe 146-200s. Despite its dominant position in Canada, Air Canada has long been hobbled by a high cost structure, a problem which has been accentuated by the fall-off in demand in the wake of 11 September. The precipitous decline in passenger volume on its lucrative Asian routes because of fears of the SARS disease proved the final straw. Air Canada has announced that its restructuring would result in the elimination of its smaller fleets, including its Boeing 747-400s and 737-200s, and its BAe 146s. The departure of the 146s at the end of their current leases had in any case been long anticipated.

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