Air Canada strikes deal with regulators as it battles to stave off bankruptcy

0 Comments | AFP, May, 2004

MONTREAL (AFP) — Bankrupt Air Canada said it had reached a deal with government regulators on paying off a 1.3 billion dollar (988 million US) deficit in its pension funds -- a key hurdle in its restructuring drive.

The announcement came as management and unions were locked in last ditch talks hoping to meet two key conditions set by potential financial savior Deutsche Bank ahead of a Saturday deadline.

A deal on the pensions deficit was the first hurdle for the bankrupt airline to clear before midnight Saturday.

Both the unions and company managers want to pay off the deficit over a 10-year period -- twice the period allowed under Canadian law.

The airline said that the Office of the Superintendent of Financial Institutions (OSFI), a regulatory...