The Board presented downsizing plans in advance of 9.11 and AC was moving towards changing to a lower cost carrier at that time. TANGO had been set up as one response, and AC had called its unions to the table to outline cost cutting needs. Seats were being removed from J because the ".com" bust had affected AC's two biggest business customers: Nortel and JDSUnifaze. The business slump was recognized in Canada long before the Americans woke up to that reality. None of the US carriers had begun to rationalize their ops prior to 9.11.
The AC Board adopted a major redirection plan, took a significant gamble on the future with one issue in mind: reducing operating costs and reevaluating routes and the very logic of the traditional model used by most NAmerican airlines. It was clear even before 9.11 that domestic travel was becoming cost sensitive as taxes and fees were piled on and shifted to the customer. But transborder and intercontinental routes remained strong and viable.
Then came 9.11, which decimated the transborder ops. And Canada's own version of 9.11 has been SARS, which has knocked the critical North Pacific for a loop. Afterall, these were the routes AC so coveted from CP, and figured under normal circumstances, it could carry other commitments based on the revenues and profits from those routes.
And it was not just the labour commitments it took on from the CP merger that created problems. The anti-ONEX strategy resulted in a major share buyback [60% of all outstanding shares at two to three times their average trading value pre-ONEX ($6)] that added debt beyond what the balance sheet could handle once traffic began to drop.
Yes, one can argue the Board made some bad decisions, but no more so than you can argue this with BCE's board under Jean Monty's failed designs. As I have argued, if the Board's role is to serve the best interests of the shareholders, then it did this by ensuring they lost no money in all this. Their buy-back of shares meant everyone holding AC stock got more than they paid -- had they been long term shareholders and not bought in after the ONEX run-up -- and those who feel betrayed are the investors who bought back in at more than the settled price range of $3 to $4 AC shares had traded before the most recent problems.
If no other NAmerican airlines were losing money, or filing for one form or another of Chapter 11, than I would say there is a strong case to be made. But that is not the case, so AC's board can be said to be no worse than those overseeing UA or AA or US or NW or DL or CO. [LCCs are a different matter and cannot be used in this comparison for too many reasons to set out here.] At least AC's long term shareholders have not suffered the plight of those holding stock in these US carriers.
As for the staff-related matters, there is a lot of denial on the other side of the bargaining table too. Businesses that are in depressed industries, and who are losing buckets of money, cannot afford to pay employees indefinitely at rates that make their product uncompetitive. The pilots strike, and the threat of a FAs strike, certainly contributed to instability coming out of the ONEX battle.
Given what they had to deal with, I doubt the Board could have done much better. And even with another president, AC would likely not be in that much of a different situation.