Will Continue Flying During Reorganization

Canada's largest airline is in trouble. Filing for bankruptcy, ailing Air Canada cited heavy debts, and a severe downturn in air travel bookings as the main reasons for its heartache. In Canada, bankruptcy means filing for protection under Canada’s Companies’ Creditors Arrangement Act.

With nearly $9 billion (US) of debt, this action protects them until the First of May and will allow the airline to put together a series of changes designed to modify itself into a leaner, more competitive carrier. Air Canada says it's committed to maintaining its schedule in the interim and will keep flying throughout this reorganization.

Air Canada is reported to have secured $700 million (US) of 'debtor-in-possession' financing from GE Capital Canada, in order to keep flying.

On the schedule for discussion include a need for reductions in labor costs, a reformulation of its fleet to emphasize smaller birds (like the Canadair RJ) and a plan to shore up its pension fund. Air Canada has some 40,000 employees supporting a fleet of 357 aircraft. Trading in Air Canada shares was halted on Monday after their value fell to C$2.10... only thirty cents above their all-time low of C$1.80.... recorded after September 11th.

FMI: www.aircanada.ca