Air Canada’s holding company has revived plans to offer a 15% stake in regional carrier Jazz after the Canadian government dropped plans for a new tax, which had caused the offering to be shelved last September.
Jazz will be converted into an income trust, the same investment vehicle used last June to sell a similar stake in AeroPlan, Air Canada’s loyalty plan. Based on the estimated value of the Jazz trust, its offering could generate C$150 million ($128 million). The Jazz sale is likely to attract buyers because of the steady income Jazz receives from its fixed-fee deal with Air Canada.
Air Canada provides the fuel and pays Jazz an hourly rate regardless of how many Air Canada passengers Jazz actually flies. Next up after Jazz will probably be the sale of a minority stake in Air Canada Technical Services. ■
Source: Airline Business
