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Gold/Mining/Energy : Air Canada is taking off?
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To: Alomex who wrote (900)10/10/1999 10:59:00 AM
From: Luke12_15  Read Replies (1) of 1033
 
What do think will happen to CA?????
You actually hit the nail on the side of the head. you wrote "I don't think AA is willing to put one more cent into CA. I think CA would be rescued by government re-regulation of the industry, perhaps forced code share within Canada."
Wrong. This battle originated in the US. It is also between AMR and UAL. Neither one of these big guys want any disruption in thier cash stream. AMR will, as a last resort, keep CA alive with a cash injection because they would lose more if they allow CA to go bankrupt.
AC knows this. Some people are confused by the announcement this week that AC star alliance partners and the BOM will buy 35% of AC. This is not a counter-offer. This is a counter-move. As long as only 35% of shareholders say NO this deal goes away.
Also AC has addressed concerns that it is simply waiting for CA to go bankrupt. Such is not the case. Untrue. AC has already made a proposal to keep CA alive but were rejected by CA. AC most likely will make another offer once CA realizes that the Onex deal will not "fly"
You can be sure that any deal put forward by AC will favour AC and its shareholders.

Finally, in reference to the Onex "commitments" may I say that schwartz has done an excellent job of marketing. He travelled around the country gathered all the negative concerns and then made a bunch of promises to people. Limited promises. I wonder what will be the cost of these promises to shareholder value?????? also If the star alliance were to lose AC I wonder who they would partner with in Canada and how this would affect "Airco".

J Stephen Jollimore
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