http://business.financialpost.com/2013/06/10/air-canada-pushes-ahead-with-cost-cutting-aims-to-slash-pension-deficit-by-2020/

After Air Canada’s financials were plagued by its multi-billion dollar pension solvency deficit for years, Canada’s largest airline is finally ready to cut costs. Not only this, but the airline is planning to diversify their fleet options to ensure that both higher efficiency and lower costs can be reached.

In a time when many major American airlines- United, American Airlines, Delta- are struggling to remain profitable, it is refreshing to see Air Canada re-focus their business while making sound financial choices. However, their decision to offer “Air Canada Rouge”, a budget-conscious spinoff of the brand, may encounter issues similar to a project gone bankrupt nearly a decade ago, “Air Canada Tango.”

The premise for Air Canada Tango was largely the same as that of “Air Canada Rouge.” Air Canada is planning to throw all short-haul, low-demand flights to this sub-brand, while freeing up larger jets for farther and more popular destinations. A decade ago, Air Canada Tango failed because the costs to re-train flight crew were obscene, the cost to purchase or lease the airplanes a ridiculous burden, and the demand for such flights low.

When such a business model failed during a time when gas prices, airport taxes, and labour was considerably cheaper, it becomes difficult to see the rationale for such a sub-brand in an even tougher economic time.

http://www.theglobeandmail.com/report-on-business/economy/housing/toronto-new-condo-sales-see-worst-august-showing-in-a-decade/article14464065/

Toronto sold 633 condos during the month of August. That’s the lowest number the market has converted in a decade. Just two years ago, the same month yielded 1923 sales.

Jim Flaherty, the Finance Minster of Canada, expressed a concern for the Toronto real estate market when he felt that too many new condos were being built. This, Flaherty warns, might lead to a crash.

These worries remind me of a familiar Canadian city gone condo-crazy: Vancouver. With over one hundred new developments across the Metro Vancouver, we follow a pattern of behaviour not unlike Toronto. However, Vancouver was recently crowned- or I suppose dubiously awarded, depending on your stance- the second most expensive place to live in the world. While there are fewer pending developments in Vancouver, a potential adjustment in interest rates coupled with oversupply and high prices might prove just as deadly.

On the other hand, many have pointed towards foreign investment and immigration as major factors lending support to the health of Vancouver’s real estate market. Although they may be keeping the market afloat, their investments generally exert an upward pressure on the price of homes in Vancouver. While these investors might be helping Vancouver avoid a crash similar to the one Flaherty worries will happen to Toronto, the inflated price makes it difficult for first-time homebuyers to make their first investment.

http://online.wsj.com/article/SB10001424052702303492504579112650388231322.html

It seems like Li-Ka-Shing (lovingly referred to as Superman) can’t resist selling- or in this case spinning off- his assets in Hong Kong. In my previous article, the business mogul was busy looking for an offer for his gigantic supermarket chain, Park’N’Shop. Now, less than a month later, Asia’s richest businessman is ready to take his utilities company public.

In an alleged response to the U.S. Federal Reserve’s decision to start winding down its bond purchases, the choice to go public has been rumoured to be based on Mr. Li’s wishes to gain “financial strength” so he may assess opportunities on an international level.

While businesspeople are always looking for new markets to enter, Li-Ka-Shing’s recent impulse to throw away so many of his flagship businesses in Hong Kong must represent some dubious outlook of his on the island’s future. Not only is Mr. Li withdrawing from many of his existing businesses, the report finds he is investing far less in Hong Kong and much more into foreign ventures such as European infrastructure and telecom.

Perhaps most profound will be the aftermath of his decisions. His actions today are sure to depress a population with even more uncertainty about the future. While the vital markets in Hong Kong are growing once again, Li-Ka-Shing’s rash departure from the peninsula might prove too ominous for confidence-lusting investors.