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Article Excerpt
M2 PRESSWIRE-2 April 2003-AIR CANADA: Air Canada to restructure under CCAA -- Business as usual for airline and subsidiaries; all operations and customer programs, including Aeroplan to continue without interruption -- $1.05 Billion (CDN) DIP Financing arranged from General Electric Capital Canada Inc -- New holding company to be created for Air Canada family of companies(C)1994-2003 M2 COMMUNICATIONS LTD
RDATE:04012003
Montreal -- Air Canada announced that it has filed for protection under the Companies' Creditors Arrangement Act (CCAA) in order to facilitate its operational, commercial, financial and corporate restructuring. The success of this massive transformation is dependenton fundamental labour cost restructuring with amendments to collective agreements, work rules and wages. The CCAA process will allow Air Canada to restructure its balance sheet and costs to complete its transformationinto a leaner, more efficient, lower cost airline through savings obtained mainly from aircraft lessors, lenders, bondholders and labour groups.
"Clearly, while not our preferred course of action, a CCAA filing is necessary to allow Air Canada to make the required changes to compete effectively and profitably in a changed environment," said Robert Milton, President and Chief Executive Officer. "Air Canada's customers around the world can continue booking with confidence that their travel plans will not be disrupted. It has been repeatedly demonstrated that the action we havetaken today to restructure will not create a disruption to service nor should it impact in any way our commitment to safety and customer service - thishas been demonstrated by US Airways and United Airlines in recent months. Aeroplan members will have continued access to the benefits associated with our frequent flyer program throughout the restructuring process and beyond.
Employees, upon whom we depend upon to continue delivering the safe and reliable customer service Air Canada is renowned for around the world,will continue to be paid on their regular payroll schedule. Suppliers will be paid in the ordinary course for goods and services provided going forward after the filing date.
"While we were able to generate in excess of $1 billion in liquidity through the DIP facility to finance our restructuring and transformation, in view of falling revenues as...
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