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Victor Li's reputation on the line in Air Canada gamble

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Last year, Canada and Hong Kong shared the dubious distinction of being two of the worst Sars-affected areas outside the mainland.

Perhaps ironically, the resulting fallout sent Air Canada, Canada's largest airline, into bankruptcy protection and now into the arms of white knight Victor Li Tzar-kuoi - deputy chairman of the Cheung Kong Group and a Canadian citizen.

And the rainbow on the horizon could be the potential for more flights into a deregulating Chinese aviation market.

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That might be mere speculation but the deal allowing Mr Li's Trinity Time Investments to acquire a controlling 31 per cent stake in Air Canada for C$650 million (HK$3.87 billion) is now a step closer after Canadian court approval.

Despite the ignominy of bankruptcy protection since April, this acquisition remains high profile and comes with considerable patriotic baggage attached. Mr Li has very publicly put his reputation on the line to resurrect the debt-laden airline.

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It is too early to tell if the transaction represents a masterstroke of timing, the acquisition of a distressed asset at a rock-bottom price, or is a case of biting off more than one can chew.

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