Air Canada Strapped for Cash

[CLguy]

AC had basically no Far East routes

The only reason AC never had any Far East routes was because they didn't want them and make no mistake, if they wanted them they would have had them. When they were a Crown Corporation they chose the then lucatrive European routes and the government wouldn't let CP Air anywhere near Europe. Remember this was all before deregulation. The only overseas routes CP Air could get were the then less lucrative routes in the Pacific and only years later when it was obvious the paying routes of the future were in the west then AC wanted them. If CAI would have went bankrupt they still would have ended up with them anyway so the merger really wasn't needed to secure the Far East.

The merger happened because it would have been political suicide for the Chretien Liberals to deal such a blow to the west by letting CAI fail without government intervention.

[Old fella]

The merger happened because it would have been political suicide for the Chretien Liberals to deal such a blow to the west by letting CAI fail without government intervention.[/quote]

So very true, and what better way than to have the Eastern based airline come to the rescue and contribute to national unity and at the same time , get western votes!!!

[rd1331]

AC had basically no Far East routes

if they wanted them they would have had them.

If CAI would have went bankrupt they still would have ended up with them anyway so the merger really wasn't needed to secure the Far East.

Actually No, and Not necessarily.

Getting those routes isn't an I want them give them to me situation. Many of the routes are limited to the rights to those routes. CAI had the rights, AC didn't have the rights. For AC to have gotten them they would have had to apply for the rights to those routes and if more rights to those routes became available they would have gotten them maybe.

If CAI just went bankrupt, C3 who was already in negotiations for them would have most likely gotten them. AC needed those routes, without them today, AC would not be doing very well at all. Without merging with CAI, C3 would have most likely gotten those routes and wouldn't have gone bankrupt and it would be a much different picture today.

Without the merger AC would have most likely gone under, because if the government was going to let one company go under then there was no way the public would let them pick and choose which company goes under and which company doesn't. It definately was a political choice but, it was also a live or die decision for AC, they needed the Far East routes and the only way to get them was to merge.

[bmc]

Seasons Greetings everyone.

Route allocation is negotiated between the governments of countries. There is agreement about how many carriers each country can have flying between countries. Specific cities, capacities, frequencies, cargo capacity are all negotiated. The respective government's then award the routes to the airlines.

The Far East was not lucrative in the early 50's. Europe was. Air Canada was given all the European routes. CP Air was given Asian routes.

With CP's demise, the allocation of those routes remained to be seen. Quite likely Ac would have been awarded most of them.

[yyz monkey]

Achtung! Wit ze stock prices for AC.A shares at $1.50. Ze Germans shall take over ze wurld. Ok, just Air Canada today... but zuun ze Germans shall rule ze wurld!! At least after the formation of LuftCanada we can kybosh the Air Canada act, right??

I, for one, gladly welcome our sauerkraut eating overlords with open arms (and fresh sauerkraut).

[KAFUFO]

The merger happened because it would have been political suicide for the Chretien Liberals to deal such a blow to the west by letting CAI fail without government intervention.

except the chretien motto was "@#$! the west we'll take the rest. and (the and is for bird dog) he won three strait majorities by doing it that way.

[Panama Jack]

except the chretien motto was "@#$! the west we'll take the rest. and (the and is for bird dog) he won three strait majorities by doing it that way.

In watching Canadian politics year-in and year-out, I sometimes wonder whether there isn't the very real possibility of a political fracturing of Canada during my lifetime. Painful as it was during the time, I feel I am now much better off after my divorce also.