Newspaper article The Christian Science Monitor

The Flak Flies in Canada's Air Wars

Newspaper article The Christian Science Monitor

The Flak Flies in Canada's Air Wars

Article excerpt

THIS air war is being fought on the ground. It is the battle for dominance in Canadian skies between Air Canada and Canadian Airlines, and it is not just the airline executives - firing press releases and advertorials - who are doing battle.

"This is getting really bitter, we're getting a hard time from the competition," says a Vancouver-based flight attendant from Air Canada. "I was walking through the terminal and asked a Canadian {Airlines} pilot if he'd had a nice flight. 'Why should I tell you,' he said."

That competitive bitterness between employees of the two airlines has only surfaced in the past year as the battle has intensified. The latest development could increase the rancor.

Air Canada has made a billion-dollar bid for the international routes of Canadian Airlines and eight large jets operated by its only major competitor.

The answer from PWA Corp., Canadian's parent company, was a quick refusal. But the Calgary-based airline says the bid alone could put Canadian Airlines out of business and leave Montreal-based Air Canada the monopoly carrier in Canada.

"It's not even an offer," says Rhys Eyton, chairman of PWA. "It's a malicious public relations strategy."

Canadian Airlines is renegotiating its debt and says the Air Canada offer could make its creditors nervous and force the company to do some kind of deal with Air Canada. But Mr. Eyton says he has headed off that crisis for now.

"We were on to a lot of creditors and shareholders that this {offer} was aimed at, and up to this point we've had solid support," Eyton says.

ALTHOUGH Canada's once heavily regulated airline industry is now seen by the government as a private affair, both airlines have asked Ottawa to step in, at least as referee.

"The government can't allow this to go on," Eyton says. Prime Minister Kim Campbell needs to end the airline war before it becomes an election issue this fall, he says. "It's going to be a terrible, terrible debate in the election. …

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