The Dow Jones Index climbed 2.3% yesterday on choppy sentiment, after losing steadily recently, but an oil price below USD60 gave most airlines some tailwind. Hawaiian Airlines, AirTran and Air Canada shares were the biggest gainers, with 6.8%, 5.6% and 5.3% increases respectively.
Air Canada unions lining up – one to go
Air Canada shares climbed 5.3% as speculators gambled that union support for the carrier’s pension deferral plan would fall into place. The previous day the Air Canada Pilots Association (ACPA) had agreed to management proposals by a narrow margin. There is now only one union outstanding, the militant International Association of Machinists and Aerospace Workers, which has previously voted down the proposal, with slightly over half of its members voting against.
If the unions do not all fall into line, Air Canada will not be able to meet a 30-Jul-09 debt pensions payment deadline, which would make it almost certain that the carrier goes into bankruptcy. Deferral of the pension obligations will allow some breathing space, but there is concern across the company – most marked among the engineering and maintenance union members – that job security is also at risk.
North & South America selected airlines daily share price movements (% change): 13-Jul-09