War hurts Air Canada

Wednesday, April 2, 2003 | 11:01 a.m.

Canada's dominant airline won't curtail service to Las Vegas after filing for bankruptcy protection Tuesday.

Air Canada, the 11th largest airline in the world, has 11 round trips a week between Toronto and McCarran International Airport.

John Reber, a spokesman for Air Canada, said the company would restructure under Canada's CCAA bankruptcy proceedings -- Companies' Creditors Arrangement Act -- the Canadian equivalent of Chapter 11 bankruptcy protection in the United States.

"All flights are operating as usual," said Reber from the airline's Montreal headquarters.

Air Canada, the 12th largest carrier at McCarran by volume, flew 140,436 passengers to and from Las Vegas in 2002. It competes on the Toronto route with America West Airlines, which offers four round trips a week to McCarran.

In announcing the filing, the company said it still had not fully recovered from the terrorist attacks of Sept. 11, 2001, and that the downturn in travel had recently been exacerbated by the U.S. war in Iraq as well as the mysterious severe acute respiratory syndrome disease from Asia. A case recently surfaced in Toronto.

In its court filing in Toronto, Air Canada said it had secured more than $1 billion in financing from GE Capital ($724 million, U.S. currency) to keep it flying while the company is restructured.

The Associated Press reported Tuesday that Transport Minister David Collenette said the Canadian government has been asked for assistance, but that it ruled out a cash bailout and is instead considering loan guarantees.

Another small player at McCarran, Arlington, Va.-based US Airways, emerged from bankruptcy protection Tuesday, but the No. 3 carrier at the airport, United Airlines, continues to operate under Chapter 11.