AIRCanada is to continue with a bid to buy rival Canadian Airlines following the collapse of Onex Corporation’s proposal to merge both carriers.
A court in Quebec ruled last week that Onex’s own bid was illegal because a shareholder is not allowed to own more than 10% of Air Canada. However, Canadian is threatened with bankruptcy if it fails to find a buyer, which could allow Air Canada to complete a buyout.
Air Canada needs the support of American Airlines, which has a 33% share in Canadian, to make the offer successful and will also have to pay substantial recompense to pull Canadian out of Oneworld and put it into Star Alliance. If Air Canada’s bid fails, Canadian’s Oneworld partners may bail it out.