Posted at 2:05 p.m., Friday, November 9, 2001

Canada's No. 2 airline closes amid labor impasse

Advertiser Staff and News Services

TORONTO — Canada 3000 Inc. shut down last night after the country's second-biggest airline failed to reach an agreement with flight attendants over job cuts earlier in the day.

Canada 3000 grounded its 38-plane fleet, stranding thousands of passengers and throwing 4,400 people out of work, though Transport Minister David Collenette said today that discussions are under way to get the Toronto-based airline back in the sky.

"They do believe that they can still operate, that parties are still coming to the table," Collenette said in response to a question in the House of Commons.

A Canada 3000 flight scheduled to depart Hawai'i this afternoon at 12:55 p.m. was canceled.

Suzanne Meisenzahl of Connoisseur Holidays, a Honolulu travel agency, said she had helped about two dozen stranded passengers book new flights out on Air Canada, the nation's No. 1 carrier. Meisenzahl said Signature Vacations of Canada is paying for the new tickets for stranded Canada 3000 passengers.

"We will be open over the weekend and help anyone who needs it. There are some special rates that we've made available to help these people," Meisenzahl said.

Aloha Airlines held the contract to provide the ground services for Canada 3000 flights in Hawai'i.

Canada 3000's passenger traffic has slumped since the Sept. 11 terrorist strikes, adding to problems created by an already slow economy. The company was hurt by the acquisition this year of two rivals just as the economy began slowing.

The stock dropped as much as 76 percent today.

A Toronto judge yesterday afternoon granted Canada 3000 protection from creditors, and the airline said in court documents filed yesterday that it was in talks with Canadian Imperial Bank of Commerce to obtain financing.

Air Canada will adjust its schedule to accommodate Canada 3000 passengers, the Montreal-based carrier said in a statement distributed by Canada NewsWire. Air Canada said it reduced some fares by 50 percent for one-way travel for passengers stranded by Canada 3000's shutdown. Discounter WestJet Airlines Ltd. said it's looking for ways to assist Canada 3000 passengers.

Canada 3000 said in the court filing that it needs to shed 1,500 workers and reduce capacity by 30 percent.

Before Sept. 11, Canada 3000 had about 95,000 passenger bookings a week. Since the attacks, bookings have ranged between 46,246 and 65,824 a week, the company said in the filing.