Trinity Time walks away from Air Canada investment
Last Updated Fri, 02 Apr 2004 18:03:53
TORONTO - Trinity Time Investments said Friday it will not go ahead with its proposed $650-million investment in Air Canada – at least for the time being – making good on an earlier threat to walk away if unions did not agree to more concessions.
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INDEPTH: Air Canada
However, Trinity Time said it did not rule out getting involved in Air Canada's restructuring in the future "if circumstances change sufficiently."
"We are of course disappointed in this outcome," Trinity director Harold Gordon said in a statement which released Air Canada from its exclusive investment deal with the company. Air Canada, it said, is now free to try to find another key equity investor.
Gordon said Air Canada's financial performance was "somewhat weaker" that Trinity Time had expected. "In particular, labour cost and productivity savings promised by Air Canada's unions under Air Canada's collective agreements are not being fully achieved," he said.
AIR CANADA ANNUAL RESULTS
Just minutes after the Trinity Time announcement was made public, Air Canada released its 2003 financial results. They showed that the airline had a net loss of $1.87 billion last year. The operating loss, which excludes reorganization and restructuring charges, was $684 million.
"Our restructuring has become more challenging as a result of record high fuel prices, increased domestic capacity by our low cost competitors and the geopolitical issues faced by the airline industry as a whole," Air Canada CEO Robert Milton said in the earnings release.
But Milton said the airline was "well positioned" to carry on business while it searches for an alternative key investor and said it was business as usual for the airline, its customers and employees.
"We trust that our unions and other stakeholders will recognize the urgency of resolving the remaining obstacles to our exit from CCAA [creditor protection]," Milton said.