AIRPLANES Group, the investment vehicle set up by GPA as part of its refinancing completed earlier this year, stands to lose cashflow of $7.3 million (£4.5 million) over the six months to next March because of a restructuring plan being put forward by Canadian Airlines.

Canadian Airlines has approached its creditors, including Airplanes Group, with proposals to reschedule its debts as part of an overall financial restructuring.

Airplanes Group was a key vehicle in GPA's refinancing. The group sold 229 aircraft into the special purpose company for $4.5 billion. To finance this, Airplanes issued notes or bonds secured against the aircraft, which were taken up by investors in Europe, the US and Japan.

Airplanes Group has thirteen aircraft on lease to Canadian Airlines, including six A320 aircraft on operating leases and seven 737-200A aircraft on finance leases. This makes Canadian the third largest lease of Airplanes Group aircraft.

Canadian is seeking a deferral of operating lease rentals for the three-month period from December 1996 to February 1997 and a deferral of finance lease principal payments for a six month period, also starting this month. It has said it will repay the deferred payments with interest over a two-and-a-half-year period from. October 1998.

If accepted, the proposal would result in a loss of cash flow to Airplanes Group of approximately $7.3 million over the six months to May 1997.