The future for our airline friends up North

Bidding for Air Canada has been narrowed down to two potential suitors.

    U.S. buyout specialist Cerberus Capital Management LP and a company controlled by Canadian businessman Victor T.K. Li.

    Both were among more than a dozen suitors that expressed interest in the insolvent airline, the company said, adding it hoped to make a final choice before the end of October.

    Air Canada, the country’s dominant airline and world No. 11, said it selected the two finalists because of the “higher enterprise and equity values” of their proposals as well as their lower completion risk.

Potential deals preserve Air Canada’s ability to sell part of its Aeroplan frequent flyer program later to raise additional cash.

But why would anyone want to make a C$700 million equity investment in a failing airline? The National Post offers an assessment of the potential and pitfalls for a reconstituted Air Canada.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Leave a Reply

Your email address will not be published. Required fields are marked *