Air Canada Considers Consolidation with U.S. Carrier

Air Canada’s parent said it has been approached by private equity and pension funds about acquiring the airline, and that the company isn’t ruling out consolidation with a U.S. carrier, according to Bloomberg.

Robert Milton, CEO of ACE Aviation Holdings, said on Friday that a tie-up between Air Canada and a U.S. airline wasn’t “inconceivable” and that it “made a lot of sense” for a U.S. carrier to look into a merger.

However, Canadian law restricts foreign airline ownership to 25 percent, and the airline’s board would have to be controlled by Canadians. Therefore, any U.S. airline making a bid for Air Canada would have to have a Canadian partner.

ACE Aviation Holdings owns 75 percent of Air Canada, and executives have said they are looking to cash out and wind up the holding company in early 2008.

Air Canada reported a net profit of $35 million in the fourth quarter of 2007, reversing a loss of $144 million the year prior. The airline’s full-year net income for 2007 was $429 million.