NRI DIARY

OTHER STORIES RELATED TO NRI DIARY India Calling London Diary Race Relations Cinema: Good, Bad and Ugh! Looking Glass Business: Falling Stars Media: Whose Wave is it Anyway American Round Up Weekly Round Up Business: Early Departure Living: Forward March Entertainment: The NR Eye

Even though he had slept late after the pre-Diwali dinner the previous night at his home in Entibicke, 28-year-old Harmit Bawa woke up early that Friday. The garment importer and wholesaler had a flight to catch to Delhi. Suddenly, the phone rang and a friend informed him that there was no longer any Canada 3000 flight to where he was going.

Barely a month after it took off on its first non-stop flight to India, Canada 3000 has halted operations. On November 9, Canada's second largest airline cancelled its flights and grounded the entire fleet of 38 aircraft, leaving 4,800 employees in the lurch, thousands of passengers stranded and scores of travel agents to pick up bills.

Bawa managed to catch a flight to Delhi two days later. But others weren't so lucky. Param Pal Singh from East York, Toronto, had to pay through his nose to get one-way-tickets from India to Canada for himself and his family, before his "short emergency leave" expired.

In the aftermath of the September 11 attacks, Canada 3000's revenues were badly battered, and the plunge of the Canadian dollar further affected its charter business. But the final straw was the launch of Air Canada's no-frills Tango service on November 1, which matched Canada 3000 in routes, timings and costs.

Canada 3000's collapse followed days of negotiation. In September, Ottawa had pledged $75 million in loan guarantees but the deal fell through when the airlines failed to meet conditions including a viable business plan, new equity and job and capacity cuts.

On November 8, Canada 3000 sought bankruptcy protection from its creditors under the Company Creditors Arrangement Act. It disclosed that some suppliers were threatening to ground the airline, besides which it had also failed to reach an agreement with one of its unions to significantly reduce staff. The airline was behind schedule on about $45 million in payments, and despite stopping payments to major creditors, it expected to have less than $1.5 million available in cash by November 10, anticipating a negative balance of $34 million by the month end.

A day later, the directors and company President Angus Kinnear resigned and Canada 3000 declared bankruptcy with Deloitte and Touche Inc appointed as trustees. The company, which had gone public in mid-2000 with $10 a share, saw its shares plummet 66 per cent to $1.09 a share, before trading stopped on the Toronto Stock Exchange on November 9.

Meanwhile, shares of the three other publicly traded Canadian airlines rose: Transat shares jumped $1.50, Air Canada nudged up 22 cents to $3.84 and Wesjet Airlines closed at $19.60, up a dollar.

Canada 3000's collapse has plunged the travel trade into gloom. Surjit Babra, Toronto-based president of Skylink, one of the biggest wholesale travel agents in North America, says: "The impact was immediate. The law requires travel agents to bring back stranded passengers and the Travel Industry Council of Ontario (TICO) expects the agents to bear the cost."

Yuvraj Datta, 31, who is manager of Gill International Travels in Toronto-one of the largest consolidators for Canada 3000 tickets to India-said that by tico's earlier ruling, his company would have to refund over $100,000. "How can any travel agency be expected to bear this cost?" he asks. Now TICO has agreed to pay for passengers to return and to refund unused tickets. "Our company had issued over 400 tickets for flights to India, and we were holding hundreds of more bookings. We had to accommodate the passengers as best as we could," he says.

While the chaos that followed the flights cancellation is slowly sorting itself out, the Indian community is saddened at the lack of a direct flight to India. But travel continues, albeit at higher rates.

Nina who lives in Brampton had to buy five more tickets on a European carrier. G.S. Bhalla, who was to leave for Delhi in December with wife Pinky, has now bought tickets at $400 more each on an European carrier. It's a longer journey to India this winter, as well as harder on the wallet.