The company has suffered financially due to the slump in travel and weak economy. If an agreement had not been reached, Air Canada may have been ordered by the court to liquidate all assets and essentially shut down. Company executives feel that reductions in salary and employment are the only way to build a new future for Air Canada. The airline is expected to layoff 10,000 of its 40,000 employees.
See "Ailing Air Canada, Pilots Agree to Last-Minute Cost Cutbacks", Los Angeles Times, June 1, 2003