Has AC received a government bailout since privatisation?

[Rotten Apple #1]

My wife and I had this argument enroute today during our drive across Vancouver Island. She remembers the news headlines from 2003 as saying there was a bailout by the federal government during the bankruptcy protection process. I said 'no', they received no federal funds during the process (apart maybe from writing off some debt owed to the Feds as part of the creditors/bondholders agreement). I have very limited access to internet during this vacation, so I am asking those who know best to let me know.

Thanks

John

[Cam]

I don't think so. Nothing direct, as in cash. But I'm not sure about that. I think NAVCANADA wiped out a whole bunch of fees for them, something like 200 million.

[MacDoo]

Nope - no bailout money. The employees took it on the chin, with reduced wages (some up to 20%). NAVCANADA did not give a 'let' on fees either.

[teacher]

In CCAA (of any company) the creditors ie: fuelers, NavCanada and other suppliers are paid back pennies on the dollar. This isn't a bail out but bankruptcy.

[dream_big]

Through long in depth stories I've been told, AC did receive funding but all through creative accounting. Not directly seen by human eye but through some changes and loops here and there it equated to some funds going to AC. Can't remember the story behind how it work, nor do I have any proof but just what I've heard.

[Mig29]

Zero

[Smitty]

Not true guys.

AC recieved money from EDC during the last round of refinancing.

http://www.newswire.ca/en/releases/arch ... c9392.html

http://www.centreforaviation.com/news/2 ... nism/page1

[whiteguy]

Not true guys.

AC recieved money from EDC during the last round of refinancing.

http://www.newswire.ca/en/releases/arch ... c9392.html

http://www.centreforaviation.com/news/2 ... nism/page1

Since when are loans considered "bailouts"?

By the way these LOANS have since been repaid!

[Smitty]

A bailout can come in the form of a loan.

http://www.investopedia.com/terms/b/bai ... z1WSdvLvQk

http://en.wikipedia.org/wiki/Bailout

[Mig29]

Smitty,
we are talking about non-returnable bailouts, like your scholarships or bursaries you get from the Government hacks for education....

[Smitty]

My apologies.

I've re-read the original question and it refers to the bankruptcy in 2003 during which no financial assistance was provided by our government.

[Bede]

Bailouts are always in the form of a loan. A very low interest loan which often does not get repaid.

The US and Cdn gov'ts "bailed out" the automakers. It was a debt (loan) and equity (by stock no one else would) bail out.

PS to the original poster. You may be right, but you're on vacation and may not want to prove the wife wrong. Happy wife, happy life.

[CanadaEH]

Air Canada was given money after 9/11. So was WestJet, Skyservice, Transat albeit to a much smaller degree.

[whiteguy]

Air Canada was given money after 9/11. So was WestJet, Skyservice, Transat albeit to a much smaller degree.

No money was given to any airlines after 9/11.

AC had to get special permission from the government to layoff employees to help stem the loses after 9/11. AC was still under the 2 year restriction of no layoffs and route closer after the takeover of CP.

The only assistance that was given out was for new security measures implemented after 9/11.

[CanadaEH]

Sorry Whiteguy but you are incorrect. Canadian Airlines were given $160 million after 9/11 by the Federal government. Air Canada received $100 million of that with the remainder going to WestJet, Canada 3000, and Air Transat. Milton had requested $2 billion for Air Canada but that was shot down, obviously.

"Collenette announced Tuesday $160 million in short-term aid to the airline industry, $100 million of which would go to Air Canada."

http://www.tc.gc.ca/eng/mediaroom/relea ... e-1996.htm

I did some Google-ing and found this article if anyone has interest in it: http://www.centreforaviation.com/news/2 ... nism/page1

[teacher]

"The package announced today provides compensation to air carriers for the Government of Canada's decision to close Canada's airspace following the tragic events in the United States," said Mr. Collenette. "It provides much needed funds for air carriers and specialty air operators recovering from the sudden disruption in business associated with these unprecedented events."

Not a bail out but compensation for preventing them from making money. Right there in the statement.

[whiteguy]

Sorry Whiteguy but you are incorrect. Canadian Airlines were given $160 million after 9/11 by the Federal government. Air Canada received $100 million of that with the remainder going to WestJet, Canada 3000, and Air Transat. Milton had requested $2 billion for Air Canada but that was shot down, obviously.

"Collenette announced Tuesday $160 million in short-term aid to the airline industry, $100 million of which would go to Air Canada."

http://www.tc.gc.ca/eng/mediaroom/relea ... e-1996.htm

I did some Google-ing and found this article if anyone has interest in it: http://www.centreforaviation.com/news/2 ... nism/page1

And that's what you call a bailout????? So Westjet received a bailout, Air Transat got a bailout.........

[CanadaEH]

I stated that Air Canada (and the others) were given money; I never once mentioned the word bailout.

You said no Airline was given money after 9/11. You stand corrected.

[whiteguy]

I stated that Air Canada (and the others) were given money; I never once mentioned the word bailout.

You said no Airline was given money after 9/11. You stand corrected.

Yet your posting in a thread asking about bailouts given to AC in 2003. What does it have to do with 2001?

Your just putting the spin on it by stating AC was given money.

[CanadaEH]

Wow, must be a touchy subject for you.

[whiteguy]

Wow, must be a touchy subject for you.

Just posting the facts buddy! Your just trying to spin this government compensation as a bailout to AC in a thread about bailouts!

Not touchy at all. You want to see touchy, look in the WJ forum anytime something remotely negative is said about them!

[CanadaEH]

The only facts you posted was pointing out that the question was about 2003. You got that right. Everything else - not so much.

[vic777]

Government interference with the collective bargaining process is a bailout for incompetent management.

[duranium]

Bailouts are always in the form of a loan. A very low interest loan which often does not get repaid.

If I may interject the following history footnote into the discussion

Way back , when Canadian sank into financial distress after a few mergers to many, that is when they coughed up many million dollars too many for Max Ward's airline, the Feds of the time came a running in with a sweetheart deal nobody could refuse and it was not an unrepayable loan. Guess what ? remember the ''Flying Taj Mahal '' and it's sisters. The Feds paid such an inflated price for 4 orphaned planes ( the airbus 310 )that it made headlines months and months after the deal and folks are still shaking the head in disbeleaf. Sure the Feds got some junk, but at what price. So, bailout comes with different spots

[yycflyguy]

Government interference with the collective bargaining process is a bailout for incompetent management.

Exactly! I would only add that perhaps it is not "incompetent" management as it is unscrupulous management.