Guest MikePapaKilo Posted April 22, 2003 Share Posted April 22, 2003 This item cut and pasted from the Financial Post. My apologies for the big piece. I could not get the link to do its thing. This article speaks very well to what is inherently WRONG with a commercialized air navigation system. If there was ever any doubt, there is clear indication in this item that Safety Equals Money. Surely there is a better way..... Fee row threat to air safety: Nav Canada Seeks quicker payment of $44M from Air Canada in bankruptcy court hearing Paul Vieira Financial Post Tuesday, April 22, 2003 CREDIT: Ted Jacob, CanWest News Service Nav Canada, a not-for-profit agency that manages Canada's air navigation system, said in a court filing it wants the right to withhold services from Air Canada and its subsidiaries if the airline does not pay its bills. ADVERTISEMENT The safety and integrity of the country's air traffic control system is in peril unless a court orders Air Canada to start paying its weekly Nav Canada bills, documents say. Nav Canada, in a notice of motion filed by its lawyers, will today ask Justice James Farley of Ontario's Superior Court of Justice to direct the insolvent airline to pay for air traffic control services on and after April 1 -- the day Air Canada filed for creditor protection -- otherwise safety might be compromised. "Nav Canada's ability to protect itself from further exposure to credit risk ... is of paramount importance in view of Nav Canada's ability to continue to provide an essential safety-related service," said William Fenton, Nav Canada's chief financial officer, in an affidavit. The not-for-profit agency that manages Canada's air navigation system said it wants the right to withhold services from Air Canada and its subsidiaries if the airline does not pay its bills. "Collection and recovery of charges for the navigation services provided by Nav Canada is critical to [its] financial stability and to the maintenance of the integrity of the Canadian civil air navigation system," the federal agency's notice of motion said. However, Nav Canada and other parties -- such as other creditors, unions representing workers and plane lessors -- may not get a chance to argue their case. People familiar with the file say Air Canada's lawyers will ask Judge Farley for a delay in proceedings of "at least a week, and maybe more." "The present situation suits them just fine," said a lawyer representing one of the unions, "because they have an order saying they can walk away from collective agreements." Sean Dunphy, Air Canada's lead lawyer, declined to comment. "The best thing is to hear what we have to say in court," he said. Air Canada will ask for a 60-day extension to its protection under the Companies Creditors' Arrangement Act, which is expected to be granted. According to court documents, Air Canada owes Nav Canada about $4-million a week for air traffic control services. To date, Air Canada has not paid, or been forced to pay, any of the charges since April 1. Nav Canada argues that under CCAA, it is entitled to require "immediate payment" for service rendered after the court issues an order granting creditor protection. Moreover, the initial order cannot require Nav Canada to advance more credit. For the first two weeks in April, ended April 8 and 15, Nav Canada billed Air Canada $4.04-million and $4.8-million, respectively. Air Canada already owes Nav Canada $44-million for February and March. The agency has said it will be forced to increase its service fees, largely because of Air Canada's refusal to pay, by an amount that will let it break even for the current fiscal year. Nav Canada, in conjunction with several airport authorities, entered into talks with Air Canada about setting up a payment schedule while Air Canada restructures. Mr. Fenton, in his affidavit, said a similar schedule was set up for US Airways and United Airlines following their filing for Chapter 11 in the United States. However, Air Canada declined to agree to any payment schedule, the affidavit said. Meanwhile, court documents filed by the airline's monitor, Ernst & Young, suggest the airline's cash will dwindle to $75-million by July 4. The airline, when it filed for bankruptcy protection on April 1, had about $424-million in cash resources available. Link to comment Share on other sites More sharing options...
Guest kevenv Posted April 22, 2003 Share Posted April 22, 2003 Seems ludicrous that ACA can refuse to pay it's bills that have accrued since filling for CCAA. I admit I am not too familiar with the process so perhaps someone can enlighten me: Is ACA trying to pull a fast one and are they doing the same to other agencies it owes for services and goods provided since April 1? Link to comment Share on other sites More sharing options...
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