Canada 3000, the country's second largest airline, ceased operations on 9 November, having filed for protection from its creditors and revealed plans to cut capacity by 30% and lay off 1,500 employees the previous day.
The cause of the reversal was not immediately clear as Flight International went to press. The airline now has 30 days to reorganise. Observers feel it could re-emerge in its original form as a charter operator.
Before the announcement that it had ceased operations, the Toronto-based carrier had obtained approval for a court-supervised financial restructuring after failing to agree concessions with its unions, which had offered 680 job cuts.
The airline sought bankruptcy protection after failing to meet cost-reduction criteria required for C$75 million ($47 million) in Canadian Government loan guarantees and after its proposal to close the recently acquired Royal Airlines division, axing 1,400 jobs, was blocked by the Industrial Relations Board.
Canada 3000 Cargo, which operates a night freight network and is independ-ently managed, is unaffected.
Michel Leblanc, former president of Royal Aviation, has offered C$25 million in cash and C$24 million in assumed debt to buy back the airline, which he sold to Canada 3000 last January for C$84 million. Canada 3000 fired Leblanc earlier this year and filed a lawsuit alleging he overstated Royal's value.
As Canada 3000 went under, Air Canada reported a loss before tax of C$160 million for the third quarter. In contrast, low-cost carrier WestJet reported a 32% increase in net profit to C$13.7 million.
Source: Flight International
