Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 10 pages
Data source: Published sources
Topics:
Canadian Airways; Trans-Canada Air (TCA); Canadian Airlines; The National Research Council of Canada (CNR); Air Canada; Onex Corporation; PWA; Free market problem; Deregulation of Canada's aviation sector; Companies' Creditors Arrangement Act (CCAA); Canadian Auto Workers (CAW); Canadian Union of Public Employees (CUPE); GE Capital; Victor Li; Trinity Time Investments
Abstract
Air Canada, which had remained Canada''s dominant airline since 1930s, found itself in deep financial trouble with an income loss of $828 million in 2002. Events like the SARS outbreak in late 2002, coupled with the Iraq war in 2003, aggravated the financial difficulties of the cash starved airline. On 1st April 2003, with an outstanding debt of $12 billion, Air Canada announced that it had filed for protection under the ''Companies'' Creditors Arrangement Act'' (CCAA) to facilitate its operational, commercial, financial and corporate restructuring. In late 2003, when Air Canada was in desperate need of cash inflow to come out of its bankruptcy, Victor Li, a wealthy businessman from Hong Kong bought a 31% stake in the airline through his company, Trinity Time Investments, for $650 million. Although Victor Li''s involvement in Air Canada was looked upon with suspicion by many, Air Canada welcomed it as a necessary step to rejuvenate its beleaguered business.
About
Abstract
Air Canada, which had remained Canada''s dominant airline since 1930s, found itself in deep financial trouble with an income loss of $828 million in 2002. Events like the SARS outbreak in late 2002, coupled with the Iraq war in 2003, aggravated the financial difficulties of the cash starved airline. On 1st April 2003, with an outstanding debt of $12 billion, Air Canada announced that it had filed for protection under the ''Companies'' Creditors Arrangement Act'' (CCAA) to facilitate its operational, commercial, financial and corporate restructuring. In late 2003, when Air Canada was in desperate need of cash inflow to come out of its bankruptcy, Victor Li, a wealthy businessman from Hong Kong bought a 31% stake in the airline through his company, Trinity Time Investments, for $650 million. Although Victor Li''s involvement in Air Canada was looked upon with suspicion by many, Air Canada welcomed it as a necessary step to rejuvenate its beleaguered business.