Onex' restructuring proposal better than Air Canada offer claims Canadian Airlines president

Airline Industry Information, Nov 1, 1999

AIRLINE INDUSTRY INFORMATION-(C) 1997-9 M2 COMMUNICATIONS LTD

The president and CEO of Canadian Airlines has told a Canadian parliamentary committee that Onex Corp's proposal to restructure the Canadian airline industry is a better solution than the counteroffer proposed by Air Canada. Kevin Benson told the transport committee that the current duopoly that exists in the Canadian airline industry is not sustainable due to the costs and international market erosion, and believes that a change is inevitable. Benson believes that Onex Corp's proposal 'protects the jobs and rights of all stakeholders, and would create one of the world's largest, and may I add best, airlines.' Benson has asked the committee on transport to support the offer and make its implementation possible. Lastly, Benson dismissed fears that AMR Corp's rights with regard to Canadian Airlines posed the threat of American control of the Canadian airline industry, explaining that all rights with regard to Canadian Airlines are 'extinguished in the new deal with Onex.' In related news, the Canadian Competition Bureau has urged the Canadian government to allow foreign carriers a larger presence in the air industry and to let foreign airlines fly passengers between Canadian cities via the US. The Bureau has also suggested that the government allow the creation of a new class of carrier that would only fly within Canadian borders, but could be foreign-owned, or that the current 25% limit on foreign ownership of Canadian carriers be increased to 49% to give airlines greater access to foreign capital.