Air Canada parent ACE Aviation fulfils investment in US Airways-America West
September 27, 2005
ACE Aviation Holdings Inc., the parent company of Air Canada, said Tuesday it has completed its planned $75-million-US investment in the new US Airways and progress has been made on co-operation agreements between the two companies.
US Airways is emerging from bankruptcy proceedings as a new entity. ACE's investment in the firm amounts to $87 million Cdn and represents about seven per cent of the new equity in the firm.
ACE chief executive Robert Milton will serve as a director of US Airways Group Inc. as the two companies begin working together.
"This is an important transaction with great strategic significance for ACE and we look forward to working with (US Airways CEO) Doug Parker's management team going forward," Milton said, noting that the new US Airways is now the fifth-largest carrier in the United States.
ACE said "significant progress" has been made on finalizing agreements to outsource maintenance, repair and overhaul work to Air Canada Technical Services (ACTS). Some work has already been assigned to Air Canada's technical team for the maintenance of US Airways' Airbus A330 fleet.
"As US Airways moves forward post emergence, we expect to see an acceleration of, and increasing growth in, the work that ACTS does for the new carrier," said William Zoeller, chief executive of ACTS.
"At this stage final contracts have not been completed, but ACTS expects the commercial relationship to be a significant and profitable segment of its business going forward."
Midday Tuesday, shares in ACE (TSX:ACE.B) - which itself is the product of bankruptcy protection proceedings - gained 16 cents to trade at $36.46 on the Toronto Stock Exchange.
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