Now that Air Canada will not likely be sold by this year’s end, speculation has been building that ACE Aviation Holdings might be ready to decide on how they will unwind theirself when they report their earnings for the 2nd quarter today. On Tuesday, the shares of both Air Canada and ACE increased, but not close to enough in order to make up the steep dive they have been in since Air Canada announced their plans to cutback on their capacity during the last 6 months of the year due to the combination of slowing demand and unprecedented increases in the price of fuel. On the Toronto Stock Exchange, Air Canada’s stock closed at 5.51 dollars, which is up by 11.3% for the day, but it is still down over 40% since they made the announcement of the cuts in June. ACE’s shares closed on Tuesday with 10.99 dollars, up 5.5%.

With the current condition of the environment, it’s not probable that ACE will receive a competitive price if they sell their 75% hold in the carrier, says Chris Murray, an analyst from CIBC World Markets. However, he added, the present value of their share does give ACE an opportunity to purchase the 25 million other shares that they don’t own. In addition to ACE’s share in Air Canada, they consists of their 23% holding in ACTS, their maintenance unit, and about 850 million dollars in cash, following the spin off of some of their subsidiaries. The management of the holding company made the indication that they wanted to totally unwind during the first 6 months of the year, however, the soaring price of fuel, weak demand, and tense labor negotiations in place for next summer has left them holding Air Canada in spite of many private equity interests striking their aircrafts’ tires.

Find out more at: www.aircanada.com