PPRuNe Forums - Canada 3000 on the way down?

Don't think things are over just yet as I understand that the A340 has now taken off from Gatwick.

The following is from the CBC Website:

Fate of Canada 3000 hangs in balance as board weighs Royal bid.

Last Updated: Thu Nov 8 08:43:58 2001

TORONTO - Canada 3000's board of directors is wrestling with possible insolvency, hundreds of job cuts and a $49 million bid for its Royal Aviation assets.

Late Wednesday, Canada 3000 unions offered to approve 680 job cuts to help the country's second-largest airline.

Outside a meeting of Canada 3000's board and its unions, company spokeswoman Angela Saclamacis said:
The cuts would affect 180 of the airline's 577 pilots
500 of its 1,500 flight attendants

The former head of Royal Aviation has sent Canada 3000 what he calls a "serious" offer to buy back his airline – but at a price significantly below what he got when he sold it to Canada 3000 earlier this year.

Michel Leblanc, the former president of Royal Aviation, said he's offered $25 million and will assume $24 million of Royal's debt, making the offer worth $49 million – an amount that he says represents "fair market value" for most of Royal's assets.
Canada 3000 bought Royal for $82 million in stock.

Leblanc said his offer is conditional on Canada 3000 getting $30 million in loan guarantees from Ottawa.

He said his plan would save a majority of Royal's 1,400 jobs.

So far, Canada 3000 has not responded to the Royal offer.

In Ottawa, Transport minister David Collenette said the $75-million loan guarantee Ottawa had offered to Canada 3000 12 days ago was now a moot point as the company had withdrawn its business plan, saying conditions had changed.

"The company came to the conclusion that the business plan that they had originally submitted to the government was not going to ensure viability," Collenette said.

This morning, the Canada Industrial Relations Board (CIRB) dismissed Canada 3000's application to shut down its Royal Aviation subsidiary, setting the stage for a possible bankruptcy restructuring by the troubled carrier.

The airline had appeared before a CIRB hearing Tuesday to ask the board to allow it to re-open contracts, making it easier for Canada 3000 to fold its Royal operations and lay off 1,400 Royal employees without having to consider seniority rights with the other Canada 3000 employees.

But the CIRB said it didn't have jurisdiction in the matter. Board chairman Gordon Hamilton said the company and unions should get together to work out a cost-cutting plan – a suggestion quickly embraced by the Canadian Union of Public Employees, which represents hundreds of Royal employees.

Trading in shares of Canada 3000 was halted all day as the request of the company. They last traded Tuesday at $3.11.
At Tuesday's CIRB hearing, Canada 3000 president Angus Kinnear warned that the airline might have to file for bankruptcy protection as early as today.

He said the airline is losing $750,000 a day and needed to make drastic cuts to stay alive.

Canada 3000 has been hard hit by the Sept. 11 attacks and the slumping Canadian dollar, which has further slowed vacation travel to the American south.

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