Air Canada to sell assets, slash costs after posting $428-million annual loss

ARIUS · 02-06-2003, 02:10 PM

From the CBC website:

Last Updated Thu, 06 Feb 2003 13:22:31
TORONTO - Struggling to cope with huge losses, Air Canada (TSX:AC) announced Thursday it has begun difficult talks with its unions to slice $650 million a year from its labour bill. The airline will also sell off some of its assets – including possibly its Jazz regional airline.

Reports said the company is looking to cut up to 10,000 jobs from its 35,000 member workforce to save money.

Union leaders have reportedly been told by the carrier that it is losing $100 million a month and could be forced to seek bankruptcy protection by the repercussions of a war in Iraq.

Several of Air Canada's unions have no-layoff clauses in their contracts.

Prior to the start of trading, the company posted a net loss of $428 million ($3.56 a share) for 2002. In 2001, the company lost $1.3 billion ($10.95 a share) after taking a $330 million income tax provision.

"In a year of ongoing crisis for the airline industry, Air Canada recorded 2002 results that continued to surpass all North American international carriers with an over $500 million improvement in our operating results and an $887 million improvement in net results for the year," company president and CEO Robert Milton said in a release.

"While this represents encouraging progress under increasingly challenging circumstances, these results clearly demonstrate that the existing full-service network airline model is not sustainable without continued fundamental change," Milton said.

The news sent shares of Air Canada falling 44 cents to $3.06 in early-afternoon trading – a new 52-week low for the stock.

In the fourth quarter, Air Canada lost a worse-than-expected $364 million ($3.02 a share), deeper than the $277-million loss the company posted in the same quarter of last year.

"The fourth quarter, always challenging due to seasonally weaker demand, confirmed that revenue trends and market dynamics have changed irreversibly," Milton said.

"The new year is off to a rough start with the overhanging threat of war and escalating fuel prices," he said.

Selling assets

In addition to the possible sale of its Jazz regional carrier (which serves 75 cities and employs 4,000), Air Canada said it would sell:

49 per cent of Air Canada Technical Services. ACTS maintains Air Canada's fleet of 220 aircraft, as well as other airline customers. The division employs approximately 8,000 staff with six major Canadian maintenance base centres in Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver.
A "significant stake" in its Airport Ground Handling Services business, which is being made into a separate division. The ground handling operations provide customer check-in, ticketing, baggage handling, ground equipment service and aircraft ramp handling. The division employs approximately 8,500 people in Canada, the U.S., Europe and Asia.

Last month, Air Canada sold a 35 per cent interest in its Aeroplan loyalty program to Onex Corp. for $245 million.

bigredvmi · 02-06-2003, 04:04 PM

WESTJET! WESTJET! WESTJET!

02-06-2003, 05:13 PM

I have been sent to deliver a message like I am working for the frikkin Western Union.

Westjetter would like to say

"Dude, woo hoo, sweet and THANKS"

to Big Red!!!!

(OK, I made up the Dude, Woo Hoo, Sweet bit, but you get the idea).

02-07-2003, 03:02 PM

O Canada! Growing up part of my life in Montreal as the son of a French Canadian woman, I hate to see this happen to my beloved, beleaguered Air Canada.

Sentinel Chicken · 02-07-2003, 03:15 PM

Note to self: Smack the crap out of Drew and Eddy.

02-07-2003, 07:10 PM

Quote:

Originally posted by Sentinel Chicken
Note to self: Smack the crap out of Drew and Eddy.

You can smack the crap outta me all you want, I am just a little more worried about the potential "pantsing" I am letting myself in for by coming to your DFWCC meeting in April.......

Doc, is the DFW Airliners SHow usually any good? How about the DFWCC meeting the night before??

Cheers

02-07-2003, 08:08 PM

Quote:

Originally posted by Sentinel Chicken
Note to self: Smack the crap out of Drew and Eddy.

I dunno know ... I think Drew and Eddy are really cool ..

02-06-2003, 02:10 PM	#1
ARIUS Master Collector Join Date: Aug 2001 Location: Whitehorse, YT Posts: 606	Air Canada to sell assets, slash costs after posting $428-million annual loss From the CBC website: Last Updated Thu, 06 Feb 2003 13:22:31 TORONTO - Struggling to cope with huge losses, Air Canada (TSX:AC) announced Thursday it has begun difficult talks with its unions to slice $650 million a year from its labour bill. The airline will also sell off some of its assets – including possibly its Jazz regional airline. Reports said the company is looking to cut up to 10,000 jobs from its 35,000 member workforce to save money. Union leaders have reportedly been told by the carrier that it is losing $100 million a month and could be forced to seek bankruptcy protection by the repercussions of a war in Iraq. Several of Air Canada's unions have no-layoff clauses in their contracts. Prior to the start of trading, the company posted a net loss of $428 million ($3.56 a share) for 2002. In 2001, the company lost $1.3 billion ($10.95 a share) after taking a $330 million income tax provision. "In a year of ongoing crisis for the airline industry, Air Canada recorded 2002 results that continued to surpass all North American international carriers with an over $500 million improvement in our operating results and an $887 million improvement in net results for the year," company president and CEO Robert Milton said in a release. "While this represents encouraging progress under increasingly challenging circumstances, these results clearly demonstrate that the existing full-service network airline model is not sustainable without continued fundamental change," Milton said. The news sent shares of Air Canada falling 44 cents to $3.06 in early-afternoon trading – a new 52-week low for the stock. In the fourth quarter, Air Canada lost a worse-than-expected $364 million ($3.02 a share), deeper than the $277-million loss the company posted in the same quarter of last year. "The fourth quarter, always challenging due to seasonally weaker demand, confirmed that revenue trends and market dynamics have changed irreversibly," Milton said. "The new year is off to a rough start with the overhanging threat of war and escalating fuel prices," he said. Selling assets In addition to the possible sale of its Jazz regional carrier (which serves 75 cities and employs 4,000), Air Canada said it would sell: 49 per cent of Air Canada Technical Services. ACTS maintains Air Canada's fleet of 220 aircraft, as well as other airline customers. The division employs approximately 8,000 staff with six major Canadian maintenance base centres in Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver. A "significant stake" in its Airport Ground Handling Services business, which is being made into a separate division. The ground handling operations provide customer check-in, ticketing, baggage handling, ground equipment service and aircraft ramp handling. The division employs approximately 8,500 people in Canada, the U.S., Europe and Asia. Last month, Air Canada sold a 35 per cent interest in its Aeroplan loyalty program to Onex Corp. for $245 million.

02-06-2003, 04:04 PM	#2
bigredvmi Master Collector Join Date: May 2002 Location: Michigan Posts: 786	WESTJET! WESTJET! WESTJET! __________________ - Drew Sell crazy somewere else were all stocked up here

02-07-2003, 03:15 PM	#5
Sentinel Chicken Go-Getters Go Ozark Join Date: Jan 2001 Location: DFW/THE GREAT STATE OF TEXAS Posts: 4,167	Note to self: Smack the crap out of Drew and Eddy. __________________ *Piss on noise abatement!*

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02-06-2003, 05:13 PM	#3
Eddy Two Guest Posts: n/a	I have been sent to deliver a message like I am working for the frikkin Western Union. Westjetter would like to say "Dude, woo hoo, sweet and THANKS" to Big Red!!!! (OK, I made up the Dude, Woo Hoo, Sweet bit, but you get the idea).

02-07-2003, 03:02 PM	#4
NYCAAer Guest Posts: n/a	O Canada! Growing up part of my life in Montreal as the son of a French Canadian woman, I hate to see this happen to my beloved, beleaguered Air Canada.