I know no airline can be forced to buy a company but when you are told by the goverment if you do not buy this company we will raise tax's in Canada for aviaton and on aviation gas prices if you do not buy canadian or if you buy canadian you will get better tax rates, asian routes and we will not be hasseling you. I have been told this by friends of mine who are mangement in Air Canada. I could be wrong it is what I have been told.
If that were true, none of those promises indeed happened - gas prices went up, tax rates went up, and the Government appointed a ombudsman to handle complaints from taxpayers from the airline industry - and most of those complaints come from Air Canada customers.
Many of those things mentioned - gas prices, namely... but also some of the taxes - the government cannot makes promises about, especially not to a company like Air Canada, or would face serious repercussions about favoritism from other companies in the industry. The gas prices, the government cannot really control, either.....
I know it's tempting for some folks, especially AC
employees, when looking at the current state of their company, to point fingers and say that "it's all Canadi>n's fault." However, that would be wrong - the combined debt of the two companies post-merger was something to the tune of $13-15 billion
dollars. Canadi>n had brought around $5-7 billion dollars in debt to that figure. The rest, Air Canada made on its own.
After the ONEX deal fell through, Air Canada rebounded and made a move to buy out Canadi>n because they figured the time was ripe - and were deathly afraid that AMR would make another move to purchase a large stake in Canadi>n (that assumption was correct), rescueing them from immediate financial difficulties and perhaps giving AC
some real headaches, especially in the West.
That, coupled with CP
's rising image (CP had won a Best North American Airline award that year, and was going through the Proud Wings corporate makeover) struck fear into AC
's management of a new, revitalized CP
that would be able to at least close the gap between the two carriers, in terms of market share.
Realistically, I cannot see a board of directors - and the shareholders for that matter - accepting putting an attractive share-price offer to CP
's shareholders, and take on so much debt, simply to please the Canadian government. Air Canada is a business....
[Edited 2004-01-06 19:56:36]