Air Canada creditors vote in favour of restructuring plan

Airline Industry Information, August 18, 2004

AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD

Creditors of Air Canada have voted in favour of the airline's new restructuring plan which should lead the carrier out of bankruptcy over 12 months.

The Montreal-based airline said the vote was 99% in favour of the plan and that is was grateful for the strong support shown by its creditors. Air Canada now plans to emerge from creditor protection on 30 September 2004 after a formal bankruptcy court hearing on 23 August 2004 when the plan should be approved by a judge.

Creditors will receive pennies on the Canadian dollar for their debts according to the plan which grew out of a CAD183m investment proposal from New York firm Cerberus Capital Management. Creditor claims have been downsized from around CAD78bn to around CAD6.1bn.

Air Canada said that it is expecting to make a profit of CAD823m on revenue of CAD6.6bn for 2004, and CAD1.2bn on CAD6.8bn in revenue in 2005, reports The Associated Press.

((Comments on this story may be sent to aii.feedback@m2.com))