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A last way out of the crisis for Calin Rovinescu

Calin Rovinescu, CEO of Air Canada, went through crises during his years deeply involved in the airline's development and radical transformation. At 65, the in-house counsel who has expertly led his company to face the worst crisis in its history has decided not to wait for the end of the pandemic to settle down and will step down early this year. next year.

Posted Oct 17, 2020 at 6:30 am

Jean-Philippe Décarie
La Presse

The COVID-19 pandemic will therefore be the last crisis Calin Rovinescu has had to endure since he first joined Air Canada as an adviser to its privatization in 1988-1989. in 1999 when he was called in to block the hostile takeover bid of the conglomerate Onex for Air Canada

The attorney, specializing in corporate law, managing partner of the firm Stikeman Elliott, managed to derail this transaction and joined the company in 2000 management of the airline as president of the subsidiaries Jazz and Aeroplan.


When Calin Rovinescu took over the position of Air Canada manager on April 1, 2009, the airline's stock traded at 78 cents. About a decade later, last January, the stock's value hit a record high of $ 52. In 2002, Air Canada went out of business and was appointed its chief of restructuring and strategy, which may bring the company painfully out of this new crisis. In 2004, the in-house counsel left the company to found Genuity Capital, a private investment bank.

Five years later, Air Canada, weakened completely by the global recession of 2008, once again called on Calin Rovinescu as CEO, this time with the gigantic mandate to take over this company, which appears to be heading towards the abyss again.

In an interview, Calin Rovinescu told me that he had set himself four main goals when he took on this challenge: it was necessary to put the customer at the center of all the company's concerns, to reduce by 500 millions of his recurring expenses, settles in the international market and adopts a much more entrepreneurial culture.

It is clear that Calin Rovinescu exceeded his goals, and a good way to measure this is to monitor the company's stock market behavior during his administration.

When he took over the position of Air Canada manager on April 1, 2009, the airline's stock traded for 78 cents. A decade later, last January, the stock's value peaked at $ 52. Air Canada was the best performing TSX stock of the decade with an overall valuation of 3575%!

It is clear that the CEO benefited immensely from this spectacular achievement, as he was notably able to achieve 31 million profit in 2017 and 52 million in 2019, by converting the options he owned.

A crisis that hurts

Over the years he has been associated with Air Canada, the outgoing CEO had to overcome many obstacles: the hostile takeover bid for Onex, the takeover of Canadian Airlines, the collapse of the air transport market after September 11, 2001, the bankruptcy of 2003, the post-recession of 2008 … But the coronavirus crisis remains the worst crisis it will have faced.

If Air Canada posted record sales of $ 19.1 billion and record operating profit of $ 3.6 billion last year, we can expect only a fraction of those results this year as the company posted a revenue decline of 90%.

Financial analysts also all underline the strength with which Calin Rovinescu responded to the crisis by releasing in particular 6 billion in liquidity to deal with the emergency.

Still, the company was forced to cut its workforce by laying off half of its 38,000 employees, which is a disaster.

Finally, we can take stock of Calin Rovinescu & # 39; s period at the helm of Air Canada without underlining the talents of negotiator and strategist he has displayed over the years.

He has always remained a corporate attorney, as the downgraded transaction he just concluded with Transat AT just reminds us.

The pre-pandemic bid that Air Canada had to pay 720 million for Transat was revised to 190 million, and no major Transat shareholder has publicly opposed it to date.

Calin Rovinescu also expertly maneuvered last year in the acquisition of Aeroplan. After announcing in 2017 that Air Canada – Aeroplan's main partner – was withdrawing from this loyalty program, the airline took advantage of the decline in the share value of Aeroplan's parent company to bid for the rebate and redeem the program .

Calin Rovinescu leaves Air Canada while the company is still going through extremely difficult times, but he can leave with a fulfilled sense of duty, aside from the sad delivery of the end of Air Canada fleet maintenance work by the Aveos company from Montreal, which led to the latter closing in 2012. In terms of success, we must highlight the order for Bombardier's 45 C-series planes announced in 2016 when Bombardier needed firm commitments. Calin Rovinescu has shown more sensitivity than its predecessor, Robert Milton, who placed an order for 45 regional jets from Brazil's Embraer in 2004. It is now the turn of his successor, Michael Rousseau, chief financial officer of & # 39; Air Canada, to assume crisis management from February 2021 and for a long time.

Calin Rovinescu in a few dates

Corporate Attorney, Stikeman Elliott
Vice President General, Growth and Strategy and Head of Restructuring, Air Canada
Founding President, Genuity Capital
President and CEO, Air Canada

Written by Rahis

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