What happens if Air Canada goes bankrupt?

It looks like mega-investor Victor Li is going to walk away from trying to
save this airline.
So the probability of Air Canada going bankrupt soon has increased.

What will happen to those who have purchased tickets for travel on Air
Canada?
Is there any risk to them? Will new flights be rebooked for them? Who will
foot the bill?

Traveler

Traveler wrote:

It looks like mega-investor Victor Li is going to walk away from trying to
save this airline.

He walked away last Friday. Judge has re-opened the door for the other
investors who had shown interest in AC. Question is how long Bankrupcy
protection will be extended. (It had been made short until April 15th in order
to put pressure on unions).

So the probability of Air Canada going bankrupt soon has increased.

Yes and no. The liberal government, plagued with some patronage scandal, is
about to call an election. They wouldn't want the disruptions caused by an AC
liquidation to plague their election campaign (besides, there wouldn't be any
planes available to charter for their own campaign :-)

What will happen to those who have purchased tickets for travel on Air
Canada?

If Air Canada is liquidated, it means that all its assets fall back into the
hands of creditors. All planes are instantly grounded and seized either by
the airport or by creditors. If a foreign airport seizes the plane (if AC
didn't pay landing fees), then the crews have to find a ride hom on another
airline, otherwise they fly the plane back empty to their home base.

Passengers already on travel would be stranded, although in the past, other
airlines have sold low cost tickets (waiving all restrictions) to the stranded
passengers on a space-available basis. When an airline ceases to exist, other
airlines cannot hope to get any money from that airline if they carry its
passengers.

What is not known is whether the bankrupcy judge ordered Air Canada to keep
sufficient cash reserves to refund tickets in case of liquidation. (and
ensuring those reserves would not be seized by creditors). That might make
things much easier.

Is there any risk to them? Will new flights be rebooked for them? Who will
foot the bill?

Generally, in case of liquidation, the passengers foot the bill. Airline no
longer has any staff at airport, doesn't answer phones. The liquidation
syndicate will wind things down, sell all assets, and then the proceeds will
be distributed amongst the secured creditors.

This was the case for the smaller airlines who went under such as Nationair,
Canada3000, as well as that french carrier (name escapes me right now). Not
sure how Sabena handled its closure.

What is not known is whether Subsidiaries such as Jazz and Zip would continue
to operate. Jazz (the regional carrier) provides "essential" services to some
communities. (Although the really remote communities are handled by First Air
and Canadian North).

"nobody" wrote in message
...
Traveler wrote:

What will happen to those who have purchased tickets for travel on Air
Canada?

If Air Canada is liquidated, it means that all its assets fall back into
the
hands of creditors. All planes are instantly grounded and seized either
by
the airport or by creditors. If a foreign airport seizes the plane (if AC
didn't pay landing fees), then the crews have to find a ride hom on
another
airline, otherwise they fly the plane back empty to their home base.

Passengers already on travel would be stranded, although in the past,
other
airlines have sold low cost tickets (waiving all restrictions) to the
stranded
passengers on a space-available basis. When an airline ceases to exist,
other
airlines cannot hope to get any money from that airline if they carry its
passengers.

Is there any risk to them? Will new flights be rebooked for them? Who
will
foot the bill?

Generally, in case of liquidation, the passengers foot the bill. Airline
no
longer has any staff at airport, doesn't answer phones. The liquidation
syndicate will wind things down, sell all assets, and then the proceeds
will
be distributed amongst the secured creditors.

This is all correct. However, if you have paid for your tickets using a
credit card, then depending on the rules associated with that card and the
country in which the card was issued, your card company may have to refund
you for the ticket you paid for but were unable to use. This varies from
country to country and I can only speak for the UK in this regard.