Air Canada also negotiated inflexible labour contracts with its unions which runs against the grain in an industry now burgeoning with low-cast, non-unionized upstarts. While the company is in the process of seeking concessions from its various unions (CAW and CUPE), Minister Collenette's tacit assurances and broad hints at a bailout have no doubt emboldened the resolve of union leaders to remain intransigent.

Why give in to company demands when the federal Transport Minister has already revealed his hand that he wants to play saviour with taxpayer dollars for Air Canada

Finally, Air Canada's business model in which three subsidiary low-cost carriers (Jazz, Zip and Tango) poach potential fares and cannibalize the mother carrier's profitability defies explanation. These issues are for the airline to solve, not taxpayers.

Fact #3: Federal transportation policy choices have hindered and hurt all of Canada's airlines, not just Air Canada.

By restricting the degree of foreign ownership allowed for Air Canada shares, Ottawa has effectively barred any foreign white knights from making a pitch to assist Air Canada.

As well, the decision to initially charge domestic travelers $12 (now $7) on one-way flights to defray post 9/11 security improvements was, let's be blunt, an offensive tax grab concocted by Mr. Collenette and former Finance Minister Paul Martin.

This flying tax - spawned in Budget 2001 - was not subjected to any impact assessments (violating Treasury Board rules) and the feds never drew and explained the line between general public security costs that should be borne by all taxpayers and private benefits to be borne by travelers through user fees.

Compare this situation to the issue of port security. On January 22, 2003, Transport Canada announced funding of $172.5 million in new marine security measures including the cost of screening cruise ship passengers. So let's get this straight, four airplanes were hijacked on 9/11 and used as missiles to bring down the two towers of the World Trade Centre, crash into the Pentagon and disintegrate in a Pennsylvania field killing 3,000 civilians in the process and our government's response is to tax people who fly.

But when it comes to cruise ships - those potential weapons of mass destruction traveling at far less than jet speed - all taxpayers will cover security costs to ensure that Osama Bin Laden's disciples don't crash them into - icebergs.

Fact #4: Ottawa transferred ownership of most airports to local authorities during the 1990s as it realized it could not fund the significant capital improvements required. But it kept control of 26 strategic airports in major cities and negotiated long-term leases with local authorities in which rent would be paid to the federal government to reflect the historic investments made prior to the transfer of these airports.

Canada's eight largest airports pay $250 million annually in rent to Ottawa. But the Auditor General has noted this regime is unfair and confusing. And by 2010, Canada's airports will have invested almost $4 billion in expansion and equipment modernization to repair Ottawa's physical neglect of the last 20 years and prepare for the 21st century.

These rents get passed onto airport tenants including airlines which in turn pass them through to consumers.

From these facts, it becomes self-evident that most of Air Canada's wounds are self-inflected and that the only role Ottawa should play is to repair the damage caused by its own policy choices to benefit the domestic airline industry as a whole.

It should axe the flying tax, eliminate or phase out airport rents quickly and lower taxes on aviation fuel. And our friend Mr. C should avoid the temptation to make any investments on the taxpayers'