Airlines Canada

Air Canada only emerged from its last round of bankruptcy protection in 2004. But the economic crisis has hammered most international carriers as traffic has dropped, forcing them to cut routes, reduce capacity and lay off employees.

Air Canada last year cut 2,000 jobs and reduced capacity by 7 percent and has made more cuts since.

Chief Executive Montie Brewer said on Friday -- as Air Canada announced an unexpectedly large loss of CAD$727 million for the fourth quarter of last year -- that the airline would seek to reduce costs by another CAD$100 million and shave capacity by a further 3.5 percent.

The company said on Friday it has shored up its balance sheet with CAD$641 million in new financing, but warned that the recession may put more pressure on its revenue in 2009. Air Canada said it has up to CAD$1 billion of assets it could use to increase its liquidity if needed.

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Air Canada

Air Canada, the country's biggest airline, could be forced to file for bankruptcy protection if it does not secure additional financing and succeed in renegotiating covenants in credit card agreements, UBS analyst Fadi Chamoun said.

"Notwithstanding lower fuel costs, we believe that cash from operations will be insufficient to meet rising pension funding obligations and over CAD$1 billion (USD$800 million) of debt repayment over the next two years," Chamoun said in a note dated February 13.

Covenants in credit card agreements could tighten further in the second quarter and result in the airline being required to maintain higher cash deposits, said Chamoun, who cut his target price for its shares to CAD$1 from CAD$1.50.

"In the absence of additional financing (sale of assets) and renegotiation of covenants in credit card agreements, Air Canada could be forced to file for bankruptcy in our opinion," he wrote.

Air Canada spokeswoman Angela Mah declined to comment on the UBS report.

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BAA Agrees UK Tax Exemptions - Report

Spanish construction and services group Ferrovial has agreed a tax break on capital gains by its British airports unit BAA that could be worth hundreds of millions of pounds, Expansion reported, citing unnamed sources.

After a year of negotiations with Britain's Inland Revenue, Ferrovial has secured exemptions on capital gains from asset sales in 2008 as well as additional planned disposals, such as London's Gatwick Airport, the newspaper said.

The Spanish company is considering indicative offers for Gatwick after it was told by Britain's antitrust regulator to sell the airport as well as London's Stansted because of competition concerns.

Ferrovial will be allowed to keep Heathrow, one of the world's busiest airports, with 65 million passengers a year.

Last month, Heathrow was controversially awarded government approval for a third runway for an estimated GBP9 billion pound (USD$12.74 billion) investment.

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Asiana Airlines

Every journey begins with the first step. Asiana, took that first step in 1988 when it was introduced as the second flag carrier in Korea. On the occasion of its 15th Anniversary in 2003, Asiana took its next major step in joining the Star Alliance network.

For more than a decade, Asiana's main goal, has been to offer its passengers the highest safety and service standards. With the aim of guiding every thought and action of its employees, Asiana adopted the term "Uncompromising Safety" as the main theme of its mission statement. In keeping with this target of uncompromising safety, Asiana maintains the youngest fleet worldwide and, as the first airline in the world, was granted ISO 9002 certification on aircraft maintenance.

Asiana's dedicated in-flight and ground service makes you feel at home while in the air. This was rewarded with the ATW Passenger Service Award for 2001. Also, a Customer Satisfaction Survey carried out over a few years by several renowned research companies, declared Asiana to be the most satisfactory airline in 2001.

With its young fleet of 69 aircraft, Asiana today serves 82 cities in 21 countries, including 18 destinations within Korea. As the largest connection between mainland China and the rest of the world, Asiana focuses not only on playing a significant role in covering all major Asian destinations, but is also expanding its global network coverage. In 2002, Asiana carried more than 12 million passengers with 283 scheduled daily flights. Asiana has 8,391 employees, comprising 799 pilots, 2,317 flight attendants and 3,880 ground staff.

Facts & Figures

• Number of aircraft: 69
• Aircraft types: A320-200, A321, A330-300, B767-300 (B767-300ER), B737-400, B737-500, B777-200ER, B747-400(747-400 COMBI)
• Hubs: Seoul Incheon
• Number of employees: 8,391
• Passengers per year: 11.83 million
• Sales revenue: US$ 3.48 billion
• Frequent flyer programme: Asiana Club
• Number of destinations: 82
• Network strengths: Korea, China, (South-/East-) Asia
• Date of entry: March 1, 2003

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