ATW Daily News

Nearing closure, ACE reports C$182 million first-quarter loss

Monday May 12, 2008

ACE Aviation Holdings, as it reported a first-quarter net loss of C$182 million ($180 million), reiterated plans to close down the business but cited difficulty in disposing of its 75% stake in Air Canada and 20.1% stake in Jazz.

This year's loss represented a 152.8% increase over a loss of C$72 million in the year-ago period.

"Given. . .fuel prices, the likelihood of something happening imminently with Air Canada vis-a-vis a sale is low," Chairman, President and CEO Robert Milton said Friday. "But we're going to continue to monitor the situation and keep all our options open." ACE has not decided how to dispose of its stake in AC, but high fuel prices have softened private equity firms' interest in a buyout.

The holding company, which was created in 2004 as part of AC's restructuring and which subsequently spun off AC and Jazz as independent entities, is planning to wind down operations within the next 3-6 months pending disposal of its assets. To that end, it announced plans Friday to buy back C$500 million worth of its shares, a move that follows a C$1.5 billion buyback earlier this year.

Air Canada last week reported a C$288 million first-quarter loss (ATWOnline, May 9).

by Aaron Karp

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