Airline Finance News - North America.

 
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New York (AirGuideBusiness - Airline Finance News North America) Apr 22, 2012

Air Canada Air Canada applies for slots at Reagan Washington National. U.S. airlines are objecting to Air Canada's application to begin service from Vancouver, British Columbia, to Washington. Air Canada has applied for slots at Ronald Reagan Washington National Airport, along with several U.S. carriers. Some U.S. rivals say Air Canada wants U.S. traffic so that it can boost its routes to Asia. Apr 18, 2012

Air Canada Air Canada posts $213 million 1Q loss amid labor strife. Air Canada (AC) reported a first-quarter net loss of C$210 million ($213 million), widened from a C$19 million net loss in the 2011 March period, and acknowledged that recent labor unrest has been damaging to ACOs company culture and public brand. But the carrier pointed out that much of the net loss was attributable to non-cash, one-time items and that its cash position remains strong (over C$2.2 billion in unrestricted cash-on-hand at quarterOs end, up C$150 million from the end of 2011). It also had strong yield growth on both transpacific and transatlantic routes, and CEO Calin Rovinescu told analysts Friday that a federal mediation process now underway will bring ACOs labor contract issues to a final resolution Ono matter whatO within 90 days. OWe expected labor to remain a major focus for us in the first quarter E and that certainly turned out to be the case,O he said. The carrier saw tentative deals reached with the leaders of its largest unions fall through, and maintains that Owildcat strikesO by pilots led to service disruptions that caused the airline to lose bookings from a Canadian public wary of the wrangling between the countryOs largest airline and its workers. OOur brand is strong and resilient, but we canOt take it or our passengers for granted,O Rovinescu said. He added that while AC is willing to pay workers Ogood wages and benefits,O it needs labor to agree to contract changes that drive Odramatically improvedO operational efficiency. The damage to ACOs culture and brand Ois recoverable,O he said. OLots and lots of stuff needs to change [in terms of how the airline operates] E Large scale transformation of a legacy carrier such as ours to compete in the new world is not without its challenges E WeOre chipping away at many, many, many inefficiencies inherent in a legacy environment such as this.O ACOs first-quarter revenue rose 7.6% year-over-year to C$2.96 billion and passenger yield lifted 3.3%, including an impressive 12.8% increase in transpacific yield. AC achieved Osolid passenger revenue results in the quarter, which is attributed to strong passenger demand and yield growth,O Rovinescu said, adding that returning to profitability Ois certainly the objective. Does it happen overnight? No.O Apr 16, 2012

Air Canada Air Canada Receives Conditional Exemption from Applicable Take-Over Bid and Related Early Warning Reporting Requirements. Air Canada announced that it has received a conditional exemption which would effectively treat Air Canada's Class A variable voting and Class B voting shares as a single class for the purposes of applicable take-over bid requirements and early warning reporting requirements contained under Canadian securities laws. The exemption, however, will become effective immediately (but only) upon shareholder approval of proposed related amendments to Air Canada's shareholder rights plan agreement, which Air Canada will seek at its annual and special meeting of Air Canada shareholders to be held on June 4, 2012. Additional details of the exemption and the proposed amendments to Air Canada's shareholder rights plan agreement are provided below. Exemption from Applicable Take-Over Bid Requirements and Proposed Amendments to Air Canada's Shareholder Rights Plan On May 4, 2012, pursuant to an application by Air Canada, the Autorit des marchs financiers, as principal regulator, the Ontario Securities Commission and the securities regulatory authorities in the other provinces of Canada granted exemptive relief (the "Decision") from (i) applicable formal take-over bid requirements, as contained under Canadian securities laws, such that those requirements would only apply to an offer to acquire 20% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada on a combined basis, and (ii) applicable early warning reporting requirements, as contained under Canadian securities laws, such that those requirements would only apply to an acquirer who acquires or holds beneficial ownership of, or control or direction over 10% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada on a combined basis (or 5% in the case of acquisitions during a take-over bid). A copy of the Decision is available on SEDAR at www.sedar.com. The Decision, however, will become effective immediately (but only) upon shareholder approval of the proposed amendments to the shareholder rights plan agreement (the "Rights Plan") dated as of March 30, 2011 between Air Canada and CIBC Mellon Trust Company described in the management proxy circular. The proposed amendments are subject to approval by a majority of the holders of Class A variable voting shares and Class B voting shares of Air Canada (voting together as a single class), voting in person or by proxy at Air Canada's June 4, 2012 meeting. Subject to certain exceptions identified in the Rights Plan, the Rights Plan currently would be triggered in the event of an offer to acquire 20% or more (on a per class basis) of the outstanding Class A variable voting shares or Class B voting shares. The proposed amendments would modify the Rights Plan to be consistent with the Decision so that it would only be triggered by an offer to acquire 20% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada on a combined basis. A copy of the management proxy circular is available on Air Canada's website at aircanada.com or on SEDAR at www.sedar.com. Objective of the Decision While having increased its public float significantly over recent years, and having a flexible capital structure that is designed to permit non-Canadian (as defined under the Canada Transportation Act) investors to become shareholders of Air Canada, the relatively small number of outstanding Class A variable voting shares (the share class for non-Canadians) may limit the ability of non-Canadians to acquire shares of Air Canada. In an effort to facilitate the acquisition of Class A variable voting shares, Air Canada applied to the Autorit des marchs financiers, as principal regulator, and the Ontario Securities Commission in order to seek the Decision. Though applicable take-over bid rules and early warning requirements apply to the acquisition of securities of a class, it was acknowledged in the Decision that aggregating Class A variable voting shares and Class B voting shares for the purpose of the take-over bid rules and early warning requirements may facilitate the acquisition of Class A variable voting shares. Because of the relatively small public float of Class A variable voting shares (compared to the public float of Class B voting shares), absent the Decision, it may be more difficult for non-Canadians to acquire shares in the ordinary course without the apprehension of inadvertently triggering the take-over bid rules or early warning requirements. The Decision considered the fact that the Class A variable voting shares and Class B voting shares have identical terms except for the foreign ownership voting limitations applicable in the case of the Class A variable voting shares. The Decision also takes into account the fact that Air Canada's dual class shareholding structure was implemented solely to ensure compliance with the requirements of the Air Canada Public Participation Act and the Canada Transportation Act. An investor does not control or choose which class of Air Canada shares it acquires and holds. The class of shares ultimately available to an investor is only a function of the investor's status as a Canadian (holders of Class B voting shares) or non-Canadian (holders of Class A variable voting shares). Shareholders of Air Canada will be asked at the meeting to consider and, if thought advisable, adopt a resolution approving the proposed amendments to the Rights Plan. The Rights Plan, approved at Air Canada's 2011 annual and special shareholders meeting, is designed to provide the Air Canada's shareholders and the Board of Directors additional time to assess an unsolicited take-over bid for the company and, where appropriate, to give the Board of Directors additional time to pursue alternatives for maximizing shareholder value. It also encourages fair treatment of all shareholders by providing them with an equal opportunity to participate in a take-over bid. For more information relating to the proposed amendments to the Rights Plan, including the full text of the proposed amendments, please refer to Air Canada's management proxy circular which is available on Air Canada's website at aircanada.com or on SEDAR at www.sedar.com. CAUTION REGARDING FORWARD-LOOKING INFORMATION Air Canada's public communications may include forward-looking statements within the meaning of applicable securities laws. Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Forward-looking statements cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Actual results may differ materially from results indicated in forward-looking statements due to a number of factors, including without limitation, industry, market, credit and economic conditions, the ability to reduce operating costs and secure financing, pension issues, energy prices, employee and labour relations, currency exchange and...

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