krisyyz
Posts: 1266
Joined: Thu Nov 25, 2004 11:04 pm

When Did AC Bail Out CO

Wed Apr 12, 2006 11:14 pm

I was reading the article about Air Canada in ATW when I came across this:
But ACE Aviation Chairman and CEO Robert Milton isn't just selling, he's buying as well. Taking a leaf from the playbook of Hollis Harris, the man who brought him to Air Canada in the early 1990s and who made a fortune for AC by bailing out Continental Airlines, Milton has bet on the reorganized US Airways with a ground-floor investment of C$87 million for a 7% holding that was valued at C$193 million in late February-Air Transport World Online 04/2006

I take it Hollis Harris was AC CEO in the 90s, but how exactly did AC help out CO? Does AC still have any investment in CO? Can anybody see AC expanding its financial base or investments into the troubled USA airlines besides US?

Thanks, KrisYYZ
 
dutchjet
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RE: When Did AC Bail Out CO

Wed Apr 12, 2006 11:42 pm

The quote is really not written correctly - AC did not bail out CO. AC was one of the investors that recapitalized CO when it emerged from its second bankruptcy. In turn for that investment, AC held a good number of shares in CO which they sold at a very good price once it was clear that CO was going to make it on its own. It was a good investment for AC.

Interestingly, SAS made a big investment in CO in connection with CO's first bankruptcy proceeding (which is the main reason why SAS moved its NYC ops from JFK to EWR, SAS wanted to work more closely with CO) - that did not work out so well and SAS's interests in CO were wiped out during the second bankruptcy.
 
USPIT10L
Posts: 1868
Joined: Tue Mar 28, 2006 12:24 am

RE: When Did AC Bail Out CO

Thu Apr 13, 2006 12:17 am

Quoting KrisYYZ (Thread starter):
I take it Hollis Harris was AC CEO in the 90s,

Hollis Harris came from DL in 1991 to take over CO in their restructuring and first attempt at revitalization. He failed miserably, mostly because CO was in such debt and disrepair. I don't believe he ever ran AC. He used to be head of what is now ACS (Airport Customer Service) at DL for many years.
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CP744
Posts: 192
Joined: Wed Jul 26, 2000 3:08 am

RE: When Did AC Bail Out CO

Thu Apr 13, 2006 12:46 am

Harris ran AC from about '93 to '96, and that's where Milton came from. They knew each other from Eagle Aviation.
 
WesternA318
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RE: When Did AC Bail Out CO

Thu Apr 13, 2006 2:36 am

Quoting Dutchjet (Reply 1):
Interestingly, SAS made a big investment in CO in connection with CO's first bankruptcy proceeding

They took over about half of Frank Lorenzo's CO holdings at the time, I believe GE and Dave Bonderman got the rest. I'll have to dig out the papers from the era.
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USPIT10L
Posts: 1868
Joined: Tue Mar 28, 2006 12:24 am

RE: When Did AC Bail Out CO

Thu Apr 13, 2006 3:22 am

Quoting CP744 (Reply 3):

Thanks. Didn't know that.
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