Business Case Studies, Gorwth Strategies Case Study, Troubled Times, Air Canada

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Growth Strategies Case Study

Case Title:

Troubled Times at Air Canada

Publication Year : 2004

Authors: Shwetark Singh, Sumit Kumar Chaudhuri

Industry: Transportation


Case Code: GRS0003

Teaching Note: Not Available

Structured Assignment: Not Available

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Air Canada, which had remained Canada's dominant airline since 1930s, found itself in deep financial trouble with an income loss of $828 million in 2002. Events like the SARS outbreak in late 2002, coupled with the Iraq war in 2003, aggravated the financial difficulties of the cash starved airline. On April 1 st 2003, with an outstanding debt of $12 billion, Air Canada announced that it had filed for protection under the 'Companies' Creditors Arrangement Act'(CCAA) to facilitate its operational, commercial, financial and corporate restructuring. In late 2003, when Air Canada was in desperate need of cash inflow to come out of its bankruptcy, Victor Li, a wealthy businessman from Hong Kong bought a 31% stake in the airline through his company, Trinity Time Investments, for $650 million. Although Victor Li's involvement in Air Canada was looked upon with suspicion by many, Air Canada welcomed it as a necessary step to rejuvenate its beleaguered business.

Pedagogical Objectives:

  • To discuss how Air Canada transformed from being Canada’s dominant airline to become a cash-starved and beleagured business.

Keywords : Canadian Airways; Trans-Canada Air (TCA); Canadian Airlines; The National Research Council of Canada (CNR); Air Canada; Onex Corporation; PWA; Free market problem; Managing in Troubled Times Case Study; Deregulation of Canada's aviation sector; Companies' Creditors Arrangement Act (CCAA); Canadian Auto Workers (CAW); Canadian Union of Public Employees (CUPE); GE Capital; Victor Li; Trinity Time Investments

Contents : 
A Brief History of Air Canada
AIR CANADA- Turbulence in the Air
Companies’ Creditors Arrangement Act
After Bankruptcy
The Asian Connection
A Challenging Future
Comparison Of Air Canada’s Historical Data
Victor Li’s Business Empire

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