Air Canada's Big Annoucements

[dartagnan]

Air Canada Announces Plans to Sell Stakes in Technical and Airport Ground Handling Service Businesses; Possible Sale of Air Canada Jazz and Creation of a Cargo Subsidiary

MONTREAL, Feb. 6 /CNW Telbec/ - Air Canada announced today initiatives to
further develop several of its operating units as stand alone businesses with
the objective of driving new revenue opportunities and attracting investment
from financial and strategic partners. Air Canada intends to sell up to a
49 per cent interest in Air Canada Technical Services (ACTS) as well as a
significant stake in Airport Ground Handling Services, a stand alone
subsidiary to be created from the airline's current airport ground handling
operations. Air Canada is also considering the sale of Air Canada Jazz, its
wholly owned regional carrier and will convert Air Canada Cargo to a stand
alone subsidiary, although no sale process for the cargo unit is being
undertaken at this time.
"There are tremendous opportunities for profitable growth in certain Air
Canada operations which, while related to our traditional airline business,
can best grow into global industry leaders as stand alone units," said Calin
Rovinescu, Executive Vice President, Corporate Development and Strategy. "As
with our recently announced new partnership in Aeroplan, we have high
expectations for the growth and success of these businesses operated under
separate management with an improved focus on operational, financial and
capital requirements. This, in turn, will enable a cost structure competitive
within each specific sector on a global basis."
Effective immediately, Air Canada is commencing a formal sale process to
sell up to a 49 per cent interest in ACTS and has engaged financial advisors
to coordinate the sale process. Air Canada's maintenance division provides
maintenance, engineering, repair, material and supply chain management to
support Air Canada's mainline fleet of more than 220 aircraft, as well as
other airline customers, in five maintenance categories: airframes, engines,
components, line and aircraft cabins. The ACTS division of Air Canada employs
approximately 8,000 staff with six major Canadian maintenance base centers
located in Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver.
Air Canada also intends to sell a significant stake in its Airport Ground
Handling Services business once it is constituted as a stand alone entity and
has commenced preliminary discussions with several strategic partners in this
regard. Air Canada's ground handling operations provide customer check-in,
ticketing, baggage handling, ground equipment service and aircraft ramp
handling. Air Canada employs approximately 8,500 staff in Canada, the U.S.,
Europe and Asia to handle ground handling responsibilities.
Air Canada Cargo provides a full range of airport to airport cargo
products and services across the Air Canada network. Main hubs include
Vancouver, Toronto, Montreal, Chicago, London and Frankfurt. The Air Canada
Cargo division of the company employs approximately 1,700 people in its
worldwide operations.
Additionally, Air Canada is reviewing alternatives with respect to Air
Canada Jazz, its wholly owned subsidiary serving regional markets, including
the possibility of a sale of up to 100 per cent of the carrier. Air Canada
Jazz provides scheduled service to over 75 destinations in Canada and the U.S.
with a fleet of British Aerospace 146, Dash 8-300/100 and Bombardier CRJ
aircraft and employs approximately 4000 full time employees.

[dartagnan]

Also look at this link it was to big to post here!
http://www.newswire.ca/releases/February2003/06/c7398.html

[Was_Moeman]

Alan Toulin
Financial Post

Friday, February 07, 2003
ADVERTISEMENT


OTTAWA - The federal government is willing to look at various levels of tax relief to help Canada's troubled airline industry through any restructuring, David Collenette, Minister of Transport, said yesterday.

Mr. Collenette said the government is considering its response to the situation facing Air Canada which reported a $364-million quarterly loss this week and is seeking $650-million in concessions from its labour force. The federal government could look at reducing the $24 airline security tax and reducing other fees such as airport charges and navigation system charges, Mr. Collenette said.

Although Air Canada has not yet asked the federal government for financial help, it and other Canadian carriers were turned down when they asked for direct assistance after the Sept. 11 terrorist attacks. Ottawa did offer to underwrite a $75-million loan guarantee to Canada 3000 previously but it failed commercially before the assistance was available.

Yesterday, Mr. Collenette said that Jane Stewart, Human Resources Minister, has already contacted Air Canada about the possibility of making available funds from an Employment Insurance program designed to protect jobs.
While he conceded that the air security charge may have hurt the airline by discouraging air travel, Mr. Collenette said there are larger issues buffeting air carriers around the globe.

"What is really the problem here is the world security environment following the 11th of September, 2001, the current instability in the Middle East and the potential for war with Iraq and the problem with fuel prices," Mr. Collenette said.

But Mr. Collenette said he wanted to reassure Canadians.

"I want to assure people across the country that Air Canada remains one of the world's great airlines. It is a safe airline. They offer first-class service but there is obviously a problem with the way it is structured and I believe management has tried to deal with that but they are going to have to do more," Mr. Collenette said.

The political opposition, however, blamed the government's air industry policies, and particularly its extra fees, for the airline industry and Air Canada's problems.

James Moore, Canadian Alliance industry critic, said the government has created a disaster with carriers going out of business, high prices and poor service to various parts of Canada. He said Ottawa should take immediate steps to reduce fees and taxes to make it more attractive for consumers to fly.

"They should be sending a signal that more people should be flying by making it cheaper," he said.

In addition to charges for services such as navigation, Mr. Moore said Ottawa could reduce fuel taxes and encourage airports to drop user fees.

Bev Desjarlais, New Democratic Party critic, said the disaster facing the industry is due to the government's failure to regulate competition and preserve markets for failed carriers like Canadian Airlines.

"The government wouldn't regulate capacity so we had this absolutely competitive war going on [between Canadian and Air Canada] to put the other one out of business," she said.

The federal government needs to address the sector's problems to prevent Air Canada from sliding into bankruptcy protection, she said.

"The government needs to listen to those who say to get rid of the security tax and regulate capacity."

atoulin@nationalpost.com

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