Air Canada has restructured part of the C$3.5 billion ($2.4 billion) debt owed by Canadian Airlines, with which it is merging, after reaching agreement with GE Capital Aviation Services. The deal, worth "tens of millions of dollars" according to Air Canada chief executive Robert Milton, covers the lease of a Boeing 747-400, two 767-300s, six 737-200s and nine Airbus A320-200s.
Milton has warned that Canadian will be allowed to go bankrupt and then cherry picked of assets if creditors are unreasonable. Canadian has already suspended C$135 million in payments due.
The two carriers will cut capacity by 15% on domestic routes this year, saving up to C$400 million. International capacity will grow by 12%, however, with new services from Toronto to Hong Kong, Honolulu/Sydney and Munich, and between Vancouver and Mexico City, plus 11 destinations in the USA. Workforce numbers, meanwhile, are being cut by 2,500 to 36,000.
Canadian's aircraft are being repainted, taking on the Air Canada livery of all-white with a maple leaf on a green tail, with the Canadian name behind the cockpit, chased by a Canada goose.
A name for the merged carrier has yet to be decided.
Source: Flight International
