Air Canada and the Canadian Government have appointed New York investment bankers Donaldson Lufkin & Jenrette to mediate in a dispute over the value of Canadian Regional Airlines (CRA), which the Canadian flag carrier has agreed to sell as part of its takeover of Canadian Airlines.
The pair have been arguing for months over the worth of the regional operation, which operates 53 Bombardier Dash-8s and Fokker F28s. Air Canada must put CRA on the market for 60 days, but can retain the carrier - which it would prefer to do - if no buyer comes forward. It has suggested an asking price of more than C$100 million ($68 million), but this is more than it paid for Canadian and all its subsidiaries. The government - keen to see a sale - believes this is too high.
In April, the first month of combined Air Canada/Canadian operations, Air Canada achieved 25% traffic growth. Even on a combined basis, traffic rose 7% on a 1% increase in capacity. Air Canada is reviewing fleet needs with industry rumours suggesting it is close to ordering 10 increased gross weight Airbus A321-200s, although the airline - a major A320-family operator - says: "We're not there yet. We have to complete the purchase of Canadian first".
Canada 3000 Airlines is meanwhile taking four new Airbus A319s from lessors CIT, Boullioun and GATX for use on domestic routes as it seeks to exploit gaps left by the majors' merger.
Source: Flight International
