NEARING ROCK BOTTOM.

Queen's University professor Douglas Reid is willing to lay odds that Air Canada will seek bankruptcy protection -- at two-to-one. Analyst Cameron Doerksen says the airline will soon face a liquidity crunch -- likely in less than a year. Portfolio manager Andrew Martyn says it's not immediate, but if the company files for protection, it won't be a surprise. Even before September 11 and now the Iraq war, airlines around the world were suffering. Too many airplanes with too few passengers, and only the no frills carriers -- the new kids on the tarmac -- were consistently profitable. In the first week of the war alone, says the Air Transport Association, 10,000 U.S. airline jobs were cut. For Air Canada, international travel had been a bright spot. But in February 2003, its Atlantic flights had seven per cent fewer passengers than a year earlier. And with the 3,800-employee cut, Robert Milton, Air Canada's embattled but determined CEO, has eliminated a total of 8,800 jobs, or 20 per cent of the combined Air Canada-Canadian Airlines workforce, since taking over the competition in 1999. As Andrew Martyn, of money manager Davis-Rea Investment Counsel, says, Air Canada is on a "slow-torture" path to rock bottom.