The airline Air Canada has announced that it is seeking bankruptcy protection in order to allow it to keep operating. Air Canada says that it will have to restructure and become more competitive and profitable. The bankruptcy protection it has asked for will give it time to make these arrangements.
This report from Lee Carter:
Canada's once-proud national carrier has hit hard times. Only late last year, Air Canada seemed to be contradicting the downward trend affecting US-based airlines by posting profits. But a combination of the effects of the war in Iraq, a vicious price battle with small cost-cutting competitors and the recent outbreak of Severe Acute Respiratory Syndrome in Canada and south-east Asia has led to a slump in passengers and profits. In its court filing, Air Canada revealed it had secured over seven hundred thousand US dollars in financing from G.E Capital, one of the world's largest industrial lenders, to keep the airline operating. Air Canada officials are reassuring passengers that it will be what they call 'business as usual' and that it will operate normally. The country's transport minister scotched rumours of government involvement, saying the carrier's restructuring is a private matter. The airline's debt is estimated at nearly nine billion US dollars.