Air Canada Continues Restructuring
Click here for more news / Clique aqui para mais notícias
By Darren Shannon
Air Canada said it is ready to proceed with a fundamental restructuring of its business model following the ratification of a pivotal pension moratorium agreement by the carrier’s mechanics.
The vote, a second ballot on the deal, was approved by 60.3% of the International Association of Aerospace and Workers’ technical, maintenance and operational support members that voted on July 14. Almost 51% of the group voted against the agreement in its first ballot (DAILY, July 2).
Calin Rovinescu, the airline’s president and CEO, in a release noted, “The successful conclusion of the ratification process represents an important milestone in achieving the stability required to manage through this difficult economic period.
“It is an encouraging sign of our employees’ support for working together to build a stronger business in the current economic context.”
However, gaining ratification from the airline’s five unions is only part of Air Canada’s restructuring effort. “These are extremely challenging times for both the airline industry and credit markets and there remain many hurdles to overcome, including the necessary governmental approvals for the pension funding arrangement and securing new financing [of at least $600 million] to meet our immediate liquidity requirements,” said Rovinescu.
“If that is achieved, to return Air Canada to profitability will require a fundamental restructuring of our business. This will include the execution of a disciplined and significant cost-reduction program requiring participation by certain suppliers and stakeholders, as well as new revenue generation initiatives,” he added.
Air Canada must also gain approval of its non-unionized and retired work force.
Photo: Benet Wilson
