Last updated at: (Beijing Time) Wednesday, April 02, 2003
Air Canada Seeks Bankruptcy Protection
Air Canada said Tuesday it was filing for bankruptcy protection from creditors, seeking time to reorganize its business and negotiate concessions from unions and help from the government.
Air Canada said Tuesday it was filing for bankruptcy protection from creditors, seeking time to reorganize its business and negotiate concessions from unions and help from the government.
Air Canada is by far the country's largest airline and the only scheduled Canadian carrier with an extensive route network to the United States and other foreign destinations. It employs more than 30,000 people.
Shares in Air Canada sank to a 52-week low on Monday, and trading was halted Tuesday on the Toronto Stock Exchange pending an announcement.
The move means Air Canada will continue flying during a reorganization period, but shows its difficulty coping with the industry downturn after the Sept. 11, 2001, terrorist attacks now exacerbated by the war in Iraq and mystery illness spreading from Asia.
Air Canada ended 2002 with a loss of 428 million Canadian dollars ($295 million), bringing the total to more than 1.7 billion Canadian dollars ($1.1 billion) since its last profitable year in 1999.
The company also has 12.9 billion Canadian dollars ($8.8 billion) in long-term debt and leases, which would likely be renegotiated under a court-monitored financial restructuring.
There had been speculation that a court filing for protection from creditors would enable Air Canada to get government help, most likely in loan guarantees.