The Book ......before Milton's

[Kip Powick]

TORONTO (CP) - After it took over Canadian Airlines in 1999, Air Canada seemingly had nothing blocking it from near total control of Canada's skies. But as Keith McArthur's new book Air Monopoly explores, Air Canada went from having a monopoly to filing for creditor protection in just four years. Part a history of the airline business in Canada and part examination of the current status of the industry, McArthur suggests Air Canada is ultimately doomed to be forced to merge with a foreign carrier or be marginalized as a fringe player on the international market as foreign ownership restrictions of airlines around the world are gradually disappearing.

McArthur also re-examines Air Canada's fight for control of Canada's skies with Gerry Schwartz's Onex and the then newly minted CEO of Air Canada, Robert Milton. "People wanted him to prevail over Gerry Schwartz, because of Gerry's perceived connections with the Liberals and American Airlines in the United States. Milton was the hero and within a year he just fell to this unpopular guy that was blamed for all of the problems with Air Canada," McArthur said of Milton. "So I wanted to look at that, what is it about this guy. What is it about the company and then also by the time I got to the end, the big question on so many people's minds especially people who hadn't been following the company closely is how do you manage to screw up a monopoly."

The book comes as Air Canada's restructuring reaches a critical point. A year after the airline filed for creditor protection and facing an April 15 deadline, Hong Kong businessman Victor Li, the airline's proposed new controlling shareholder, is expected to complete his review of his investment in the airline and make a decision about whether he will proceed. If Li and his company, Trinity Time Investments, walk away from the deal it will increase the possibility Air Canada could face liquidation. Li wants Air Canada's union to accept changes to the airline's pension plan to reduce the risk to the airline in the future. The unions have rejected the proposal.

"We're going to see another round of huge brinkmanship and then it's going to bring the airline pretty close to oblivion again, but my guess is Air Canada will probably emerge later this spring or in the summer and Victor Li will be the guy," McArthur said of the recent developments. "From watching the restructuring, there's been so many times that things have been brought to the brink and Air Canada again and again has said if we don't get this we're going to disappear and either they get what they want or they don't and when they don't they still manage to stick around."

Milton has also announced he plans to release a book later this year about the turbulent years he's had at the helm of the carrier. To be released in September under the title Straight from the Top: The Truth About Air Canada, the airline's controversial chief executive is promising a behind-the-scenes look at the country's largest airline during one of the key periods in the industry.