Air Canada, Jazz in CPA Negotiations
Jazz continues to negotiate new rates for controllable costs with Air Canada but if it does not reach an agreement by January 31, the issue will be referred to commercial arbitration as provided in its Capacity Purchase Agreement. The negotiations cover controllable costs for 2009 through 2011 and would be retroactive to January 1, 2009.

Mesa Defers Stock Question
A special meeting of Mesa Air Group stockholders was adjourned on Monday until the new year as shareholders consider three proposals to repurchase senior convertible notes due in 2023 and 2024; to approve issuance of new shares of common stock so that an entity can purchase 20 percent of outstanding common stock; and to approve an amendment to the company’s articles of incorporation increasing the number of authorized shares from 75 million to 900 million. The continuation of the special meeting is set for January 6 and 4 pm. The approval of the first two proposals require a vote of a majority of shares in the company’s common stock represented at the meeting while a vote of a majority of common shares outstanding is required to approve the third proposal.

Obesity Policies Crafted in Wake of Canadian Ruling
Canadian carriers are rushing to beat a January 10 deadline for crafting new policies in response to a Canadian court ruling that obese passengers can have two seats for the price of one. The rules would be the first in the world and result from a Canadian Transportation Agency January 2007 order calling for one person, one fare.
Not surprisingly the definition of obesity will determine extra seat availability, according to the agency. Its ruling calls for coverage of domestic flights and cited Southwest’s policy which offers extra seats at reduced prices for those too big to lower the armrest with dignity in its recommended policies. WestJet is considering requiring medical proof that obesity is a medical, not lifestyle, condition but unless it requires such proof of all disabled it is unlikely to fly. The policy comes under the disability rules but those who travel with a companion for personal, not necessary, reasons are not entitled to a free seat but if such an attendant were necessary they are.

Air Canada, Delta in Financing Deals
At a time when financing is proving tough, Air Canada announced that it concluded a secured financing transaction valued at US$78 million (approximately C$95 million) with Calyon New York branch and Norddeutsche Landesbank Girozentrale. In the meantime, Delta announced it will sell 18.2 million shares to make up for taxes assessed on employee stock ownership. In addition, the carrier at a December 9 investor’s meeting, indicated it would take charges on the merger with Northwest.
Air Canada’s five-year-loan matures in 2012 and represents an additional step in the implementation of Air Canada's strategy of improving its short-term and longer-term liquidity through both traditional and non-traditional means.
Delta said it will incur one-time cash costs of about $500 million in integration costs over the next three years, according to its filing with the Security and Exchange Commission. It will also incur about $950 million in non-cash charges for stock awards to its non-management personnel and a $1.7 billion reduction in Northwest’s debt.