Air Canada president and CEO Montie Brewer on April 1 plans to leave the airline, following a surprise resignation on Monday that spurred aviation analysts to warn about the carrier's potential spiral into bankruptcy.
Succeeding Brewer is Calin Rovinescu, who oversaw the airline's 18-month bankruptcy reorganization that began in 2003, then left to form Canadian investment bank Genuity Capital Markets.
The change in leadership "signals bankruptcy protection," said Research Capital aviation analyst Jacques Kavafian in a research note today, adding that Rovinescu's appointment "only makes sense" in that context.
Kavafian noted, "We believe that Air Canada may be in breach of its debt covenants, particularly the requirement of maintaining a minimum of $900 million in cash at the end of each month."
Raymond James analyst Ben Cherniavsky in a research note issued today said Rovinescu "is not a traditional airline guy, which we think works to Air Canada's advantage given its current challenges."
Cherniavsky in the note said the move to "suddenly and dramatically bringing in someone like Mr. Rovinescu—and (presumably) forcing out Montie Brewer—speaks to the extreme turmoil currently taking place at Air Canada."
"At this point," Cherniavsky noted, "we do not believe that this change does enough to materially increase the odds of Air Canada_s survival, which we pegged at 50/50, at best."
During his previous tenure at Air Canada, which ended in 2004, Rovinescu headed up corporate development and strategy, migrating in 2003 to chief restructuring officer during the carrier's bankruptcy reorganization. Cherniavsky said Rovinescu "was a key figure in the company's successful emergence."
Rovinescu assumes Brewer's seat on the company's board. Air Canada chairman David Richardson in a statement on Monday said, "Calin's reputation as a proven leader and his wealth of experience in corporate strategy will serve Air Canada well during this particularly challenging period for the world's airline industry."
As co-founder and principal of Genuity Capital Markets, Rovinescu "has led several M&A, restructuring and financing transactions," Air Canada noted in a statement.
Meanwhile, Richardson said during Brewer's tenure, "The airline has become recognized as an innovation leader and has significantly improved its product offering."
Under Brewer's leadership, Air Canada developed new pricing models—including a focus on flight passes for the corporate market
(BTNonline, Oct. 23, 2006)—shunned full content in the global distribution system, citing limitations through the channel and opened the floodgates on unbundling and ancillary revenue initiatives
(BTNonline, Nov. 6, 2006).
Business Travel News named Brewer among the Top 25 Most Influential Executives of 2006 for guiding the carrier through such initiatives
(BTNonline, Jan. 22, 2007).