Air Canada: From One Crisis to Another |
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"The chain of events that brought Air Canada to this crossroads amounts to an almost Biblical litany of woe, a perfect storm of negative news." - An article on www.globeandmail.com, in April 2003. Troubles, Troubles Everywhere!In early 2003, people in many Asian countries were struck by a mysterious respiratory disease termed as the Severe Acute Respiratory Syndrome (SARS). This highly contagious and potentially fatal disease severely affected the region's economy with the most drastic impact being on the airline industry. As business and commercial passengers cancelled their trips to the Asian countries, airline companies saw their revenues declining at an alarming rate.
It also suffered a major setback after the September 11, 2001 terrorist attacks in the US, due to the huge drop in air travel worldwide. As a result of these crises, the company posted a loss of US$428 million for 2002. The severity of the crisis in Air Canada was reflected on its stock price as well. The stock prices had rapidly plummeted through the early 2000s, reaching a 52-week low of US$2.65 by mid-March 2003.
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1] June 2003 exchange rate: 1 US $ = 1.3539 Canadian $ (C$). |
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