Air Canada: Resurgent and aggressive

摘要

When ACE Aviation Holdings, the par-ent of Air Canada, emerged from an 18-month bankruptcy restructuring in September 2004 with reduced costs and a greatly strengthened balance sheet, its near-term financial recovery prospects looked promising. However, the financial community was sharply divided on Air Canada's longer-term prospects - the key concerns were that its cost structure might not be competitive enough and that it might not be able to retain a large-enough unit revenue premium over LCCs (see Aviation Strategy, November 2004). Nine months on, while the longer-term concerns are still there, Air Canada is in the middle of staging a remarkable financial recovery. Why is it able to go against the North American industry trend and turn profitable in this environment?