Ottawa says Air Canada pension approval on track

Tue Jul 21, 2009 5:56pm EDT
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VANCOUVER, British Columbia (Reuters) - The Canadian government does not foresee any obstacles to approving a pension moratorium at Air Canada, a Finance Ministry spokesman said on Tuesday, although he declined to say when it might do so.

Cash-strapped Air Canada is seeking to waive payments to fund a C$2.9 billion ($2.6 billion) deficit in its pension fund until April 2011.

Mike Storeshaw, a spokesman for Finance Minister Jim Flaherty, said he could not "give a specific timeline at this point, but we do not expect any obstacles to doing so".

Government approval is expected soon as Air Canada has a C$100 million pension payment due on July 30 and another C$60 million due two weeks later.

($1=$1.10 Canadian)

(Reporting by Randall Palmer and Nicole Mordant; editing by Rob Wilson)