March 31, 2009

Air Canada CEO makes surprise resignation

In a sudden move, Air Canada's chief executive officer has resigned and is set to be replaced by the man who led the airline's latest restructuring effort.

Calin Rovinescu was named Monday night as president and chief executive officer and will take over from U.S.-born Montie Brewer in Montreal, The Globe and Mail reported.

Brewer joined Air Canada in 2002 and became chief in 2004, during which time Rovinescu restructured the airline in the face of mounting competition from WestJet Airlines, based in Calgary, Alberta.

Apart from the competition threat, Canada's largest airline is faced with growing debt, weaker travel demand and a mounting pension deficit, the report said. As of Jan. 1, the pension shortfall was $3.2 billion, up 174 percent from a $1.17 billion deficit at the start of 2008.

The appointment of Rovinescu, a lawyer, marks the first time a Canadian has led Air Canada since 1992, when Claude Taylor was in charge, The Globe and Mail said.