MONTREAL — Air Canada (TSX:AC.B) employees hope the rehiring of a restructuring expert as their new boss won’t mark a return of Canada’s biggest airline to bankruptcy protection for the second time in six years.
Air Canada sought protection the first time on April 1, 2003, and spent 18 months under court supervision — always continuing to fly but frequently at odds with its unions and creditors — before emerging as a leaner, restructured company.
The return of Calin Rovinescu on Wednesday, this time as chief executive officer, has the airline’s unions on edge.
“It will be interesting to see whether it is going to be something that will preserve the long-term future of Air Canada, or whether it will just be more of the same,” Capt. Andy Wilson, president of the Air Canada Pilots Association.
With the airline’s pension plan underfunded by $3.2 billion, Air Canada’s employees are its largest unsecured creditor, whose stake far surpasses that of shareholders, Wilson said.
Wilson said employees continue to be frustrated that some $2 billion has been distributed to shareholders of ACE Aviation Holdings (TSX:ACE.A), the post-restructuring parent of Air Canada.
“We are hoping this is an opportunity to fix the problems that ACE caused in the first place.”
Rovinescu replaces Montie Brewer, who has been Air Canada’s chief executive in recent years after Robert Milton, who guided the airline through the last restructuring, departed the post to become CEO of the parent company.
Joining Rovinescu as chief operating officer is Duncan Dee, who resigned from the airline last December.
The two men are reputed to be friends with Milton.
The appointments signal the airline is preparing dramatic changes to address its debts, mounting pension liabilities and other cash problems, industry observers say.
“He’s definitely a hatchet man,” Jacques Kavafian of Research Capital Corp. said of Rovinescu.