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Air Canada in Last-Ditch Survival Talks
Friday May 30, 4:48 pm ET
By Amran Abocar
TORONTO (Reuters) - An Ontario judge has set a midnight Saturday (0400 GMT Sunday) deadline for Air Canada (Toronto:AC.TO - News) to reach an agreement with its 3,400 pilots on job and wage cuts crucial to the insolvent airline's survival.
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Ontario Superior Court Justice James Farley said on Friday the court would meet Sunday morning to mull options if the two sides do not strike an agreement. Those options include imposing a court ordered settlement, a filing for bankruptcy or "some other reasonable or practical alternative."
A filing for bankruptcy would ground the airline.
Justice Farley added that Montreal-based Air Canada, which is trying to restructure under court protection from creditors, and its pilots were still far apart and criticized the two parties for failing to reach an agreement.
"Air Canada is at this time in a perilous and ultra-precarious position, plus, plus, plus," Justice Farley said. "There is no time to reach a leisurely resolution of this (or else there will be) an academic debate over the bones once the buzzards have picked it over.
"Given the evaporating position of Air Canada...and in the interests of all stakeholders including the Canadian public... this matter must be stabilized now."
Air Canada, the largest airline in Canada and No. 11 in the world, has been under court protection from creditors since April 1.
The union, the Air Canada Pilots Association, said it would continue talks with Air Canada. The court ordered the union and the airline to resume talks at 6 p.m. on Friday
"Down the road, I still think Air Canada's going to get restructured," said Richard Jones, a lawyer for the union. "Who's going to do it, who's going to own it, who's going to run it, what the terms are going to be in the future, I haven't the slightest idea.
"But I do know that this is too important a part of the national infrastructure to be allowed to simply have the lights turned off and there's too much value here."
Failure to get the pilots onside with plans to cut C$3 billion ($2.2 billion) in annual labor costs by C$770 million could jeopardize Air Canada's plans to restructure its C$13 billion of debt and aircraft lease obligations.
Agreements on some C$600 million of concessions already obtained from the airline's flight attendants, maintenance crews, ticket agents and other big unions would be voided if the pilots refuse to make concessions.
In court, Air Canada lawyer Sean Dunphy said if the airline fails to realign its labor costs "this restructuring doesn't start and it doesn't finish." But he added the airline will keep flying unless the court orders otherwise.
An Air Canada spokeswoman said it was still "business as usual" for the carrier's operations.
The company's stock was halted at C$1.67, down 8 Canadian cents, or 4.6 percent, on the Toronto Stock Exchange (News - Websites) on Friday afternoon.
The stock fell more than 12 percent on Friday morning, hitting a low of C$1.53.
Concessions Air Canada is seeking from its pilots include 800 job cuts, wage rollbacks and changes in working conditions in which they would fly smaller aircraft for less pay.
Air Canada plans to cut 10,000 jobs from its work force of 40,000, ground larger jets and revise its fare structure to compete better with low-fare operators in Canada and on cross-border routes to the United States.
A spokesman for Canadian Transport Minister David Collenette said it would inappropriate for him to comment on the Air Canada situation because talks between the airline and its pilots fall under the purview of the court.
(Additional reporting by Robert Melnbardis in Montreal)更多精彩文章及讨论，请光临枫下论坛 rolia.net
Air Canada in Last-Ditch Survival Talks
Friday May 30, 4:48 pm ET
By Amran Abocar
TORONTO (Reuters) - An Ontario judge has set a midnight Saturday (0400 GMT Sunday) deadline for Air Canada (Toronto:AC.TO - News) to reach an agreement with its 3,400 pilots on job and wage cuts crucial to the insolvent airline's survival.
ADVERTISEMENT
Ontario Superior Court Justice James Farley said on Friday the court would meet Sunday morning to mull options if the two sides do not strike an agreement. Those options include imposing a court ordered settlement, a filing for bankruptcy or "some other reasonable or practical alternative."
A filing for bankruptcy would ground the airline.
Justice Farley added that Montreal-based Air Canada, which is trying to restructure under court protection from creditors, and its pilots were still far apart and criticized the two parties for failing to reach an agreement.
"Air Canada is at this time in a perilous and ultra-precarious position, plus, plus, plus," Justice Farley said. "There is no time to reach a leisurely resolution of this (or else there will be) an academic debate over the bones once the buzzards have picked it over.
"Given the evaporating position of Air Canada...and in the interests of all stakeholders including the Canadian public... this matter must be stabilized now."
Air Canada, the largest airline in Canada and No. 11 in the world, has been under court protection from creditors since April 1.
The union, the Air Canada Pilots Association, said it would continue talks with Air Canada. The court ordered the union and the airline to resume talks at 6 p.m. on Friday
"Down the road, I still think Air Canada's going to get restructured," said Richard Jones, a lawyer for the union. "Who's going to do it, who's going to own it, who's going to run it, what the terms are going to be in the future, I haven't the slightest idea.
"But I do know that this is too important a part of the national infrastructure to be allowed to simply have the lights turned off and there's too much value here."
Failure to get the pilots onside with plans to cut C$3 billion ($2.2 billion) in annual labor costs by C$770 million could jeopardize Air Canada's plans to restructure its C$13 billion of debt and aircraft lease obligations.
Agreements on some C$600 million of concessions already obtained from the airline's flight attendants, maintenance crews, ticket agents and other big unions would be voided if the pilots refuse to make concessions.
In court, Air Canada lawyer Sean Dunphy said if the airline fails to realign its labor costs "this restructuring doesn't start and it doesn't finish." But he added the airline will keep flying unless the court orders otherwise.
An Air Canada spokeswoman said it was still "business as usual" for the carrier's operations.
The company's stock was halted at C$1.67, down 8 Canadian cents, or 4.6 percent, on the Toronto Stock Exchange (News - Websites) on Friday afternoon.
The stock fell more than 12 percent on Friday morning, hitting a low of C$1.53.
Concessions Air Canada is seeking from its pilots include 800 job cuts, wage rollbacks and changes in working conditions in which they would fly smaller aircraft for less pay.
Air Canada plans to cut 10,000 jobs from its work force of 40,000, ground larger jets and revise its fare structure to compete better with low-fare operators in Canada and on cross-border routes to the United States.
A spokesman for Canadian Transport Minister David Collenette said it would inappropriate for him to comment on the Air Canada situation because talks between the airline and its pilots fall under the purview of the court.
(Additional reporting by Robert Melnbardis in Montreal)更多精彩文章及讨论，请光临枫下论坛 rolia.net