Ciro
Topic Author
Posts: 639
Joined: Mon Aug 16, 1999 5:00 pm

And The Canadian Soap Opera Goes On...

Wed Oct 27, 1999 11:26 pm

According to the magazine "Air Transport World", Air Canada/United Airlines/Lufthansa will take over Canadian Airlines, reestructure the entire Canadian route network and leave the remaining bits and pieces of CP to create a much smaller national carrier, which will eventually code share with Delta. What a blow for American Airlines!

PS: The deal has to be approved by the Canadian government still.


The fastest way to become a millionaire in the airline business is to start as a billionaire.
 
Bicoastal
Posts: 2446
Joined: Wed Oct 06, 1999 5:56 am

RE: And The Canadian Soap Opera Goes On...

Thu Oct 28, 1999 1:28 am

Yes, it's fun reading the daily attacks flying between American/Onex and Air Canada/Lufthansa/United. Not much coverage in the daily press outside of Canada but if you log on to the Toronto Globe and Mail, you'll read its daily coverage of the soap opera. The Montreal Gazette covers it well, too.

It would be ironic that American Airlines could get shut out of the market in Canada if the Air Canada counter offer prevails. I'm a Star Alliance frequent flyer so I admit I'm biased in favor of Air Canada which I fly frequently.
Airliners.net has many forums. It has spell check and search functions. Use them before posting!
 
Daniel
Posts: 55
Joined: Sat May 28, 2005 6:05 am

RE: And The Canadian Soap Opera Goes On...

Thu Oct 28, 1999 1:32 am

american should just say no to seeling their share in canadian then at least they will still have a say in whats going on.
 
AC_A340
Posts: 2196
Joined: Wed Sep 08, 1999 12:01 pm

RE: And The Canadian Soap Opera Goes On...

Thu Oct 28, 1999 3:15 am

American will definately veto that decision. How do I know? because before onex was invoved, ac offered to buy cp's int'l routes and aa vetoed that. why would they let this go through?
 
dannyboy
Posts: 82
Joined: Wed Aug 24, 2005 1:50 am

RE: And The Canadian Soap Opera Goes On...

Thu Oct 28, 1999 3:18 am

Ciro, that was a counter-offer from AC. Nothing has been decided as of yet and won't be until Nov8. Just because AC has this counter don't expect their shareholders to automatically go there, it all boils down to which deal will make them the most $$$$$$ . As it stands now, AA has veto rights at CP, so do you really think they would approve the sale to AC under those terms with backing from UA?! Not likely.
 
B777
Posts: 378
Joined: Fri Sep 17, 1999 9:52 am

RE: And The Canadian Soap Opera Goes On...

Thu Oct 28, 1999 10:16 am

As long as Canadi>n keeps its livery and aircraft, I don't have problem with any merger. Although is sad to see the folks at Canadi>n struggling to stay or quit.

James
 
AC183
Posts: 1496
Joined: Tue Jul 06, 1999 10:52 am

RE: And The Canadian Soap Opera Goes On...

Thu Oct 28, 1999 10:23 am

Well, here's my analysis on the subject:

First off, I hardly think this is anywhere near settled. Expect a sequence of more offers/counteroffers and legal challenges to come. It will be interesting to see this unfold.

Next of all, about AA's veto. AA may have considerable control, but they can't prevent CP shareholders from tendering their stock. Or for that matter they can't stop AC from buying CP stock on the market. In the event AC manages to gain control of CP (or more precisely the holding company, which AA does not own stock in), I expect there would be negotiations, legal manoevres, and some changes to AC's offer to appease AA. Specifically, AC might change the code-share it proposes for CP to be with AA rather than Delta. Also, AC could offer to buy some services from Sabre in exchange for AA co-operating. The bottom line is that in the event of the Onex bid winning (I think it is unlikely), AA would win big. In the event of AC winning, AA could be shut out of large parts of the Canadian market. In the end, AA continuing to code-share with CP would largely be a draw, or a slight loss for AA, but better than than nothing. Their ownership in CP may be to some extent a trump card, but if they can't play it, then they lose.
 
AC_A340
Posts: 2196
Joined: Wed Sep 08, 1999 12:01 pm

Update

Thu Oct 28, 1999 10:07 pm

Air Canada is off to court today to argue that the Onex bid is illeagal. It would be considered illeagal because it is over the 10% law by far. On another note, it is quite obvious that the Gov't favours the onex deal. It is considering raising the cap on the 10% law. Air Canada argues if this had been done sooner, this would've made the way for more counter-offers. I would way rather see the AC/UA/LH/CIBC deal win, which I think it will. And a spokesman for onex said after the AC deal was announced "I'd like to compare it to the spruce goose, it looks good on paper but it won't fly" Didn't the spruce goose fly? I like to beleive it did.
 
AC183
Posts: 1496
Joined: Tue Jul 06, 1999 10:52 am

More News...

Fri Oct 29, 1999 11:51 am

Today Onex increased its bid to $13 for Air Canada shares. There have been some other changes to the conditions of their offer also. This goes to a shareholder vote in 10 days. Air Canada is rumoured to be considering increasing its buyout package. More events to unfold soon, including legal actions, reactions from AC on the changes to the Onex bid, and possibly government policy changes or clarifications. Stay tuned folks...

There's just one thing I don't understand about the Onex bid. If their previous bid was so good, why did they have to increase it by over 50%?

Oh, and for any fellow Canadians out there, did anyone notice the way Canadi>n Airlines has been acting during this. It seems pretty apparent they have no say in their own future. And did anyone else notice that despite saying only a few weeks ago that they would consider any new offers, Mr. Benson (president of CP) quickly announced that they had rejected AC's offer but admitted that they hadn't even formally recieved it then?
 
dtwa320
Posts: 101
Joined: Fri Oct 01, 1999 8:15 am

AC183

Fri Oct 29, 1999 12:49 pm

AC183...

I totally agree with what you said about Canadian having no say in their future. It's kind of like a child being caught in the middle of a custody battle. It's a shame.
 
dannyboy
Posts: 82
Joined: Wed Aug 24, 2005 1:50 am

RE: And The Canadian Soap Opera Goes On...

Fri Oct 29, 1999 1:39 pm

It is sad, really sad. Whatever they're going to do, for everyone's sake including mine, I just want it over with. Which ever way it goes. But I do agree with you guys, it's not going to happen all that quickly. 2 years from the acceptance from whichever deal till things are formally intergrated is what I hear.
 
AC_A340
Posts: 2196
Joined: Wed Sep 08, 1999 12:01 pm

RE: More News...

Sat Oct 30, 1999 8:39 am

Onex announced AA and AMR are selling their shares if the new airline goes through. That makes for a completely Canadian company almost, except for other smaller companies. I still would much rather see the AC/UA/LH deal go through. AC also has another tactic in court now, I'm not sure which law it breaks, but it will break one, Onex said they are not raising their initial offer. They obviously did. I guess they can't stand to loose. And AC put itself in a good place by signing againg with Star for 10 years. With a 325 million early leave fee. And also by signing a 10-year deal with Cara food services, instead of the Onex owned Sky Chefs. But I think I speak for all of us when I say, just vote already, the suspense is killing me.

May the best man/company win.

Incase you didn't know, AC is the best company in this endeavour. 

Who is online