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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: JayPC who wrote (2956)	9/20/2001 11:27:20 AM
From: ahhaha	Read Replies (1) \| Respond to of 24758

Why don't they do what I suggest?

To: JayPC who wrote (2956)	9/20/2001 1:59:55 PM
From: frankw1900	Read Replies (1) \| Respond to of 24758

Minister reserved about airline bailout Collenette is not the sharpest knife in the cabinet and I'm surprised he's taking this tack. But good for him. So far. There is equivocation but not abasement. It helps that Air Canada is extremely unpopular. Thursday, September 20, 2001 – Page B1 OTTAWA, TORONTO AND OTTAWA -- Federal Transport Minister David Collenette was non-committal yesterday on Air Canada's request for up to $4-billion in federal aid to cope with fallout from Sept. 11 terrorist attacks -- a bailout plea that was met with skepticism across the country yesterday. He told reporters that Canada doesn't necessarily think Ottawa has to bail out domestic carriers in the same manner that Washington is considering helping U.S. airlines. "Just because the U.S. Congress does something, just because the U.S. administration does something, doesn't mean to say that we follow suit," Mr. Collenette told reporters yesterday. Talk in Ottawa is instead turning to the possibility that Air Canada, which has been losing money consistently since taking over Canadian Airlines, is headed for another restructuring of some kind. "We have to have a major rethink of the whole industry in Canada," a Liberal insider said. "Air Canada may have to be restructured and downsized." The insider said the Liberal caucus is skeptical about the carrier's plea for money and is "quite hostile about being put in this position again." Mr. Collenette told reporters that it has been "quite apparent for some time that Air Canada has some challenges," and said Ottawa and the carrier have been discussing these "on and off." Air Canada's request for help comes on the heels of a similar plea for aid from U.S. carriers hard-hit by last week's terrorist attacks. U.S. carriers originally asked Congress for $24-billion (U.S.), but yesterday cut their bailout wish-list by about 30 per cent to $17.5-billion. Mr. Collenette was careful not to rule out assistance for Air Canada or other Canadian carriers that face a slumping travel industry in the wake of last week's terrorist attacks on the United States. But he said Ottawa is trying to determine what assistance carriers need -- and exactly how to dispense it fairly, "not just to the airline industry but to all those other industries that have been affected." He also said any solution must address the "continued financial viability of the airline industry and, in particular, Air Canada." Air industry executives are meeting with Mr. Collenette late this afternoon to discuss the financial pressures facing the sector. Critics of Air Canada were roundly skeptical, and even angry, at the carrier's contention that it needs between $3-billion (Canadian) to $4-billion to cope with fallout from last week's terrorist strikes. Liberal Senator Michael Kirby, who chaired a Senate committee on the airline industry two years ago, said he doesn't buy the Montreal-based carrier's argument that it needs help solely because of the attacks. "I am more than skeptical. It can't possibly be true." Mr. Kirby said Canada should insist on several conditions before agreeing to indemnify the airline, including the removal of the 15-per-cent ceiling on individual share ownership and the withdrawal of Air Canada's anti-takeover poison pill. He said these merely serve to entrench the company's management and board of directors, who were running the airline at a loss despite having a virtual monopoly in the country. The head of rival carrier WestJet Airlines Ltd. called the multibillion-dollar request "lunacy," and said Canadian carriers only require compensation from Ottawa for the several days that national airspace was shut down last week. Clive Beddoe, chairman and chief executive officer of WestJet, said Air Canada was headed for financial trouble "long before this tragic crisis occurred." Air Canada spokeswoman Laura Cooke said its request is not just for cash but also loan guarantees, tax deferrals and the assumption by Ottawa of preflight security costs that airlines currently bear. Air Canada president and CEO Robert Milton has said that bookings have been "extremely soft" since the attacks, and warned that without government aid, Air Canada could run out of cash. The problem is exacerbated by the fact that the airline is going into the slow fall season, when costs exceed revenue even in good years. As of June 30, Air Canada had about $1.25-billion in cash and credit available. With strong performances in July and August, that figure may have been even higher before last week's attacks. Mr. Milton said last week's three-day service disruption cost about $100-million. The airline won't say how quickly it could run out of cash. Analysts said the key question is just how much air travel dries up as a result of last week's attacks. Air Canada won't quantify the drop in bookings. globeandmail.com