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Purser-July/August 04

Making sense of Canada’s beleaguered airline industry


October 1, 2007
By Richard Purser

“Milton’s Paradise Lost,” reads the Chapter Six heading of a lively new
book. But the reference is to Robert A. Milton (20th-21st century), not
John Milton (17th century). The book is “Air Monopoly,” by Globe and
Mail transportation reporter Keith McArthur, and it’s a treat: a wild
ride through Canada’s airline wars, with the emphasis on its subtitle:
“How Robert Milton’s Air Canada Won – and Lost – Control of Canada’s
Skies.”

McArthur
carries events right up to the start of this year, when Hong
Kong-Canadian business magnate Victor Li stood poised to become Air
Canada’s controlling shareholder in a process that would make Milton
and his sidekick Calin Rovinescu rich. Now Li and Rovinescu are both
gone, Milton has just barely saved Air Canada from a breakdown in talks
with a subsequent suitor, and his own fate depends on how those talks
work out and whether he can get the company out of bankruptcy
protection by the end of September.

So McArthur should be
collecting notes for a sequel to “Air Monopoly.” This story has a long
way to go. (A recent byline labelled him as ‘marketing reporter’. One
hopes that he has not been yanked from the airline beat.)

McArthur’s
chronicle is a ‘must’ read for anyone interested in Canada’s airlines.
Even those who think they know the story will find that the book’s
wealth of personal vignettes and behind-the-scenes anecdotes carry it
far beyond any mere assemblage of newspaper clippings. The chapter on
how the airline business got whacked by September 11, 2001 is
especially riveting.

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Besides being well researched, “Air
Monopoly” is well organized. All the airlines and agencies and their
key personalities are here, but their tumultuous ups and downs are
never allowed to become confusing. The author always keeps the overall
pattern in view. Things like the Roots Air fiasco and the late John
Lecky’s desperate efforts to save Canada 3000 from sudden catastrophe
are fascinating to read about for themselves, but here everything is
shown in its place. The tale moves relentlessly from beginning to end.

McArthur
does not shy away from assessing culpabilities, and there’s lots of
blame to go around. (The book contains many reasons why David
Collenette should never have been transport minister, but McArthur also
takes on what he calls “a persistent myth at Air Canada’s headquarters”
that Collenette “forced Air Canada to buy Canadian Airlines.”)

To
this reader, assigning ultimate blame is a mug’s game. Things were
really driven by events. As McArthur says of last year’s SARS outbreak:
“Whenever it seemed Air Canada’s circumstances could not become any
worse, they did.”

Should the government ‘bail out’ Air Canada if
that (and we certainly hope not) were to become the only way to save
it? Theoretically, it should not. Air Canada is a shareholder-owned
company, not a 'flag carrier'. But would the government let the Royal
Bank of Canada fail? Canadian National Railway? Bombardier?


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