After losing 22.0% of value on 31-Mar-09, Air Canada headed down another 12.4% on Tuesday. Even a faint prospect of bankruptcy is sufficient to terrorise investors, who would probably lose everything in a Chapter 11-type protection from creditors.
With new top management in place and an announcement expected shortly - either about further cutbacks or that the airline will go into bankruptcy - shareholders inevitably feel jittery.
If the new leadership in fact just announces deep cost cutting measures, the share price is likely to rebound quickly. At least, that is, unless or until some of the carrier's unhappy unions announce industrial action. It can be expected that there is the usual game of poker being played out here behind the scenes. Meanwhile, many investors have clearly felt it wiser to watch from the sidelines.
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North & South America airlines daily share price movements (% change): 01-Apr-09