Guest PortTack Posted May 15, 2003 Share Posted May 15, 2003 Grim times indeed. That's what I found on the front page of my National Post this morning. I almost didn't pick it up off my front step, but then of course, like looking at a car wreck, I just had to. I can't find a link online but the story claims AC may not have enough money to emerge from CCAA and will have less than 200 million cash by August. Link to comment Share on other sites More sharing options...
Guest PortTack Posted May 15, 2003 Share Posted May 15, 2003 Looks like b52er has found the link below my post. Link to comment Share on other sites More sharing options...
Guest QTip Posted May 15, 2003 Share Posted May 15, 2003 This opens the door for Onex to buy Jazz at a fire sale price now and Jazz to become the master. Jazz's contracts allow for a new player to grow and be profitable. Come on Gerry!!!!! Make it happen!!!!!!! Link to comment Share on other sites More sharing options...
Wolfhunter Posted May 15, 2003 Share Posted May 15, 2003 At the onset off CCAA I must admit to being optimistic about AC’s future. I’m now somewhat less so. Aerodynamic lock point occurs when minimum thrust required equals maximum thrust available at a specified altitude/temperature for a given configuration. At low altitude, lower the nose you crash. Raise the nose you stall and crash. The situation can only be recovered with excess altitude. Understanding the threat, avoidance and positive corrective action saves the day. I don’t claim to be a financial wizard (in fact I claim not to be) but we are, I think, dangerously close to financial lock point. In my view, time is now the enemy. Drag this out much longer and working for free will not save the day. Counting on government intervention (other than indirect support) is tactically dangerous and the equivalent placing your army with it’s back to the sea. The “grace” period is almost over, it may in fact be too late. I have had the pleasure of wearing a flak jacket in far more hostile environments than this forum so take your best shot. MOVE NOW OVER! Link to comment Share on other sites More sharing options...
Guest DHC8/CRJ AME Posted May 15, 2003 Share Posted May 15, 2003 How dire is the situation? How much is manufactured by Robert Milton to get the conscessions that he wants? What is managements true mandate? Link to comment Share on other sites More sharing options...
Wolfhunter Posted May 16, 2003 Share Posted May 16, 2003 In assessing the magnitude of AC’s financial difficulties it may help to put a few numbers in perspective. As I see it, total debt is now in the range of $15.3 billion. This includes the preexisting debt, pension deficiency and DIP financing liability. Assuming I put the right number of zeroes into the calculator; if you had a stack of $10.00 bills and put 1 per second into a pot; 24 hours a day, 7 days a week, 365 days a year, it would take some 485 years to clear the debt assuming no interest. Additionally, Air Canada now only owns some 4% of its fleet. While some may rightly point out plausible debt repayment schemes as a percentage of predicted revenue, the ratio of total debt to market capitalization is frightening IMO. If indeed we are burning through $3-$5 million a day it seems to me that financial lock point (maximum cash available equal to minimum cash required for a specified operating period) can’t be that far off. In a corporation made up of independently registered corporations, the liquidation of one entity to preserve the whole seems plausible to those of us without a business degree or MBA. The concept of Jazz being the sole domestic carrier my not be as outlandish as some perceive it to be. As to the issue of corporate agendas and blame, I don’t know. There is plenty to go around and like all great extinctions; it rarely boils down to one factor. The proverbial “boast not thyself of tomorrow” seems like good advice. Were you to suggest 30 years ago that the Northern Cod would stand at the brink of extinction people would have considered you a fool. Yet a review of the contributing events today shows a frightening disregard of the most obvious warning signs. Wars in the future (I say 30 years) will no doubt be fought over access to clean water. Being as the solution is regional in nature, and given the squabbles of the regional governments involved, valuable time in seeking an equitable regional solution is being squandered to the detriment of all. Seems to me that we are still debating the shape of the negotiating table. Link to comment Share on other sites More sharing options...
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