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Discussion in 'Air Canada | Aeroplan' started by milchap, Apr 11, 2012.
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It is only a rumour....but an interesting one.
Companies' Creditor Arrangement Act filings suggest a restructuring to avoid bankruptcy or receivership. It provides protection from its creditors.
So, who's going to buy AC ... LH or UA/CO?
Maximum foreign ownership is capped at 49% following the Canada Transportation Act change in March 2009.
Also, without resolution of the pension and its shortfall, not sure who would want AC!
Oh Goodie-- Doug Parker can get his hands on AC, and leave AA alone....just kidding......but.......
Not likely as they have over $2BB in cash on hand. I would think any major new announcement would revolve around the LCC and new partnerships.
that does not mean their liabilities are greater than this...i would think that insolvent takes cash into consideration but merely because there is a lot of cash does not mean an entity is not insolvent. [added i am not insolvment]
They have some pretty large pension liabilities, but payments are capped until 2013 based on current contracts. I recall something like $13B, of which they are only paying $300-400M each year to close this gap.
Cash means thye have the ability to maintain their trade payables and their use of cash in operations bears that out. CCAA is a non starter at this time.
From the airlinewebsite.com
cancellations due to sickout ex YYZ?
AC103 to YVR Cancelled
AC117 to Calgary Cancelled
AC302 to DCA Cancelled
AC404 to YUL Cancelled
AC737 to SFO Cancelled
AC446 to YOW Cancelled
AC175 to Edmonton Cancelled
up to 10 am this am
This nonsense has to cease.....CCAA is looming on the horizon.
Is it? I thought it was lower at 25% or am I reading the Air Canada Public Participation Act incorrectly?
(c) provisions respecting the counting or prorating of votes cast at any meeting of shareholders of the Corporation and attached to voting shares of the Corporation that are held, beneficially owned or controlled, directly or indirectly, by non-residents so as to limit the counting of those votes to not more than 25%
Not that newspapers can't be wrong but also noted the lower amount quoted in a recent FP article
Despite all the tumult in the aviation industry in the last 25 years, with the rise and fall of other competitors, airport reform and Air Canada’s bankruptcy, one of the few things in the aviation sector that hasn’t materially changed is the Air Canada Public Participation Act.
The act also limits foreign ownership of Air Canada to a 25% equity stake
I think its more likely that AC will form its LCC with no unionized pilots, through some partnership that shelters them from being the same employer as the mainline. That's the danger these pilots fail to see.
I believe that there was an amendment in the Canada Transportation Act in 2009 that allowed the Cabinet discretion to increase to 49%. This would allow the Cabinet to pass regulations to permit an increase from 25% to 49%, so while the legislation stands, Cabinet has discretion to increase this amount as they see fit.
I see a couple of references to it, including (note it is not the most defined rule, and the only reason I recall it was that it was more a push by the minority government of the time):
from CTA - http://www.otc-cta.gc.ca/eng/consultation-ownership
"In March 2009, new legislation was introduced through Bill C-10, otherwise known as the Budget Implementation Act, 2009, amending the definition of Canadian in the Act to allow for the increase in foreign ownership in Canadian air carriers by non-Canadians. The amendment allows for an increase in the amount of voting interests owned and controlled by a specified class of non-Canadians to a percentage that is to be specified in regulations, which in total may not exceed 49 percent."
from a International Law Office:
"In line with the panel's recommendation on the foreign ownership of Canadian carriers, the Canada Transportation Act has been amended to allow the federal Cabinet to pass regulations that would permit non-Canadians to own and control up to 49% of the voting interests of a Canadian air carrier (an increase from the previous 25%). This is subject to the requirement that the Canadian carrier be controlled, in fact, by Canadians. Non-Canadians will continue to have the right to hold non-voting interests, provided that the air carrier is controlled, in fact, by Canadians."