Air Canada considers selling Air Canada Jazz

Air Canada announced today initiatives to further develop several of its operating units as stand alone businesses with the objective of driving new revenue opportunities and attracting investment from financial and strategic partners. Air Canada intends to sell up to a 49 per cent interest in Air Canada Technical Services (ACTS) as well as a significant stake in Airport Ground Handling Services, a stand alone subsidiary to be created from the airline's current airport ground handling operations. Air Canada is also considering the sale of Air Canada Jazz, its wholly owned regional carrier and will convert Air Canada Cargo to a stand alone subsidiary, although no sale process for the  cargo unit is being undertaken at this time.

"There are tremendous opportunities for profitable growth in certain Air Canada operations which, while related to our traditional airline business, can best grow into global industry leaders as stand alone units," said Calin Rovinescu, Executive Vice President, Corporate Development and Strategy.

"As with our recently announced new partnership in Aeroplan, we have high expectations for the growth and success of these businesses operated under separate management with an improved focus on operational, financial and capital requirements. This, in turn, will enable a cost structure competitive within each specific sector on a global basis."

Effective immediately, Air Canada is commencing a formal sale process to sell up to a 49 per cent interest in ACTS and has engaged financial advisors to coordinate the sale process. Air Canada's maintenance division provides maintenance, engineering, repair, material and supply chain management to support Air Canada's mainline fleet of more than 220 aircraft, as well as other airline customers, in five maintenance categories: airframes, engines, components, line and aircraft cabins. The ACTS division of Air Canada employs approximately 8,000 staff with six major Canadian maintenance base centers located in Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver.

Air Canada also intends to sell a significant stake in its Airport Ground Handling Services business once it is constituted as a stand alone entity and has commenced preliminary discussions with several strategic partners in this regard. Air Canada's ground handling operations provide customer check-in, ticketing, baggage handling, ground equipment service and aircraft ramp handling. Air Canada employs approximately 8,500 staff in Canada, the U.S., Europe and Asia to handle ground handling responsibilities. Air Canada Cargo provides a full range of airport to airport cargo products and services across the Air Canada network. Main hubs include Vancouver, Toronto, Montreal, Chicago, London and Frankfurt. The Air Canada Cargo division of the company employs approximately 1,700 people in its worldwide operations.

Additionally, Air Canada is reviewing alternatives with respect to Air Canada Jazz, its wholly owned subsidiary serving regional markets, including the possibility of a sale of up to 100 per cent of the carrier. Air Canada Jazz provides scheduled service to over 75 destinations in Canada and the U.S.  with a fleet of British Aerospace 146, Dash 8-300/100 and Bombardier CRJ aircraft and employs approximately 4000 full time employees.