Air Canada CEO Quits After Furor Over Crash Condolence Video

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2:04I don't really fully appreciate sensitivity to language in Canada. And once again, it came again today. And I don't think the CEO of Air Canada does as well.

2:13Scarlet Fu:Then that might be the problem. Yes, exactly right. So the Air Canada CEO is stepping down after a furor over the crash condolence video that it was only really in English, not in French. And, of course, for the 21 % of the people in Canada that have French as their primary language, that's a problem. And one of the two pilots who was killed in the crash was from Quebec. And this flight was actually headquartered in the Montreal region. I believe it came from Montreal as well. He did say bonjour and merci. I can do that. But that's it. Matthew Dion joins us here, Bloomberg Montreal Bureau Chief.

2:49Matthew, thanks so much for joining us. What's happening at Air Canada? I think we have to go back a few years ago to understand what's going on. So in 2021, Michael Rousseau was CFO and then became in 2021 the CEO of Air Canada. He made a speech in front of business leaders in Montreal. Montreal is a bilingual city, right? But within French-speaking Quebec. It's the only territory essentially in North America where people still talk French. And Quebecers want to preserve that. And there are some laws in place to preserve it because there's a lot of pressure from English coming in and a lot of influence, right?

3:31So after his speech, Michael Rousseau talks to reporters and some reporters are asking him, why did you deliver your speech only in English? Why not even a few words in French? and he essentially said that he's been able to live in Montreal for more than a decade without speaking French. He was proud of that. That sparked outrage and over the years it was a constant criticism about him from French Canadians, French-speaking Quebecers. Then last Monday he makes this video statement entirely in English like you said. He said bonjour and merci that's Hi and thank you, right? There were some captions in French at the bottom.

4:12But considering that one of the boat pilots killed was a French speaker, Antoine Foray, and you have a lot of employees working at Air Canada who are from Quebec, so it sparked outrage in the province because it was the last straw, essentially. Then you have Prime Minister Mark Carney coming in, saying that Air Canada has a responsibility to always communicate in both languages, regardless of the situation. Air Canada is subject to the Official Languages Act in Canada. There's a law in place. The two languages in Canada are French and English. So that's essentially what happened there. And you even have the National Assembly of Quebec passing a motion last week asking for Michael Rousseau to resign.

4:57So that brought us essentially to today.

5:00Scarlet Fu:Matthew, I'm looking at the Air Canada ticker on the Bloomberg terminal. If you go to the DES page, It gives you all the basic information. And what you see there is that Air Canada is based in Quebec, in Quebec City, St. Laurent, which I'm probably mispronouncing. So this is a company that's probably based in Quebec itself. Why was this not an issue from the get go? Why did he become CEO even with this language deficiency? That's that's a real good question. A lot of CEOs are appointed in Montreal and with the promise to learn a little bit of French. Michael Rousseau said that he took more than 300 hours of classes in French.

5:39And today, all he's able to say is bonjour and merci. So a lot of Cubicers are just seeing that as a lack of consideration or even something like that's very condescending on his part regarding the French language. So, I mean, he was appointed with the promise probably that he would learn French. I mean, as a CEO, it did deliver at the beginning with Air Canada, delivering the company from the COVID pandemic over the past few months, year or so. The company has underperformed global peers, but it delivered from a CEO standpoint of view, if you want. But on the French language side, it really failed here.

6:25And it failed especially last week. And today, the company had to issue its notice to shareholders for the annual meeting on May 1st. In the documents and the filings, you have the compensation of the CEO in 2025. So Michael Rousseau earned a compensation of$13.1 million Canadian dollars in 2025, up 6 % from a year ago. So that would have added another layer into this debate. And it's our understanding that Erkana wanted to end this. And there was especially a global surge for a new CEO anyway, because he was planning to retire. That surge started in January. So probably that they just announced this sooner than expected.

7:10And now he's expected to retire at the end of the third quarter of this year, which is on September 30th.

7:17Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. support for the show comes from public lately it feels like there are two types of investing platforms some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game public is positioned differently it's an investing platform for people who are serious about building their wealth on public you can build a portfolio of stocks options bonds crypto without all the bugs or the confetti retirement accounts yep High-yield cash? Yes, again. They even have direct indexing.

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8:18Scarlet Fu:complete disclosures at public.com slash disclosures. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise, proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. If you follow markets, you know the value of long-term thinking.

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9:42Meta platforms down about 18 percent this month, putting them on pace for the worst performance since October 22. I think there's some legal risks in there, maybe some spending on artificial intelligence. I don't know. Mandeep Singh joins us here. He's Global Tech Research Head for Bloomberg Intelligence. What's going on with Meta these days? Because it was a story that was working on cost cutting, number one. And number two, AI seemed to be a really viable work case to augment their advertising platforms. What's going on with the stock? Yeah, I mean, look, they have underperformed relative to the Mag7 peers.

10:19And on top of that, they had that addiction lawsuit that they lost along with Google. So from that perspective, it could create that negative sentiment that I don't think is going away anytime soon. simply because when you look at their free cash flow expectations for this year, I mean, they're spending almost$135 billion in CapEx. That'll take them to almost, you know, negative free cash flow territory. And last year, they had almost$45 billion in free cash flow. So look, when you have, you know, this much investment and people aren't even clear what the focus is on, Yes, they are building data centers.

11:06That's a real asset. But we know it's a depreciating asset. And when I look at their model relative to OpenAI, Google, and Anthropic, they don't even have a model. They don't have a large language model of their own. They have a large language model, but in the leaderboards, it's nowhere. Okay. So from that perspective, like look at how well Claude has done, you know, in terms of coding agents. And Anthropic Cloud is almost adding billion dollars in revenue every week. How do we know that? Well, there are some leaked sources. And when you look at, you know, the token usage, that's the one metric that everyone is tracking right now for these LLMs is how much is that token usage growing.

11:52And some of that can be, you know, reflected in the revenue run rates. Others is tied to training these LLMs. But at the end of the day, that's a real metric in terms of how your model is getting used. Meta doesn't even have a model that is being utilized externally. So the promise was Meta will use the LLMs within their own ecosystem and that will drive revenue. And so what saved Meta, otherwise the stock would have been down even more, is their top line is still quite healthy. You know, they've guided to mid 20 % top line growth. But that will reduce in the back half because of tougher comps.

12:32So I think that's the challenge. And that lawsuit, I mean, this has never happened in terms of Meta losing a lawsuit around their product being addictive and dangerous, harmful. And so we already know they are banned in Australia. And in the EU, there is a proposal to ban the app for under 16. So from that perspective, if you are losing that demographic that is one of the highest using demographics for your platform, that becomes a challenge. And now there could be more lawsuits, you know, along the similar lines to the ones where they had, you know, a verdict go against them. This is the first time, really, one of the first times, I'm not going to say the first time, one of the first times where some of these, the legal issues for a technology company are really material, potentially.

13:23They are. Because, I mean, you asked, myself included, you asked everybody on the street, I spend too much time on my phone. If they have children, they will cite that I'm thinking as one of their top, top worries. Yeah. And I think that's a global situation. Any parent anywhere in the world would probably say that. Yeah. And now the judge said it actually harmed in this case. So it's true. And I mean, the million dollar fines are not that big. But suddenly, if you have got 2000 more lawsuits like that, then it all adds up. Now, is this similar risk for a Google for? I don't know. I mean, you could argue YouTube.

14:01You spend too much time on YouTube. But in YouTube's case, the harm was more in terms of autoplay than the content or the filters. So in terms of the type of content, I think the verdict said that it was more harmful from the meta side compared to YouTube, where it was more like, yes, it shouldn't be autoplaying content or things along those lines. Not about the type of content. But there is a very fine line. And I do agree, you know, YouTube and Instagram are similar in that regard. But we'll see if there are more lawsuits. All right. Just real quick. Are we going to get an AI IPO this year? Like, is it Anthropik or is it?

14:44Most likely it's going to be Anthropik 4Q IPO. And they really at the run rate that they are in. I mean, everyone in the private market right now is queuing to get, you know, a small slice of that transaction, which we're expecting. So Anthropic would be one. What else would this chat GPT go? Yeah, I mean, if Anthropic is going public, I think right now OpenAI feels they're losing share to Anthropic, given they had a head stack. So from that perspective, I do think OpenAI will likely go public if Enthropic announces they're going public. Stay with us. More from Bloomberg Intelligence coming up after this.

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16:16Scarlet Fu:Advisory services by Public Advisors, SEC Registered Advisor, crypto services by ZeroHash. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions slash repetitive tasks and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business.

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17:39Scarlet Fu:Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Let's get right to it. Ed Price joins us here in studio. He's a non-resident senior fellow at NYU. Ed, we're day 31 into this war in Iran. I think if you ask 10 different people out there, they might give you 10 different reasons. What are our objectives for being there? Not sure they were clearly articulated. So that makes it maybe even more difficult to articulate how we get out of there. What's your view of how the war in Iran has developed over the past four weeks?

18:14Thanks, Paul. Well, let me first of all start by saying that I hope and pray our service personnel are safe. So I don't revel in this at all. I think that the initial strikes that we carried out on Iran were successful in the sense, like I said last time, they are our enemies and we killed them. And we can't forget that as a bottom line. I think you're right now to say what is the second phase of this war. and it does look like there's a growing consensus that it's not being handled very well and possibly also a mistake and you have people, august people like Larry Fink pointing to the price of oil, which does seem to be the coalition point, the muster point for those who are concerned.

18:47Let me just paint a quick counterfactual. In February 2022, Russia attacked Ukraine. Imagine if China had gone after Taiwan and Iran had gone after Israel on the same day. So I know that this war looks messy right now, But there is a counterfactual in which our enemies overwhelm us and we lose that war. I think that Russia and Iran are losing theirs.

19:09Scarlet Fu:But that didn't happen. And right now the U.S. is in a bit of a mess, some would say. And Americans are rightly questioning what the objective is at this point. To Paul's point, how does the U.S. resolve this in the end? What does victory look like? So the obvious answer to that is the one that Americans don't want to hear. which is that there'll be an escalatory ladder in which the United States has to pour more and more resource, more and more blood and treasure. And that means boots on the ground. And that means regime change. That is the way that the regime would fall, right? And that's the way the region would be reconfigured.

19:48I'm slightly stumbling over my words because it's a terrifying prospect, even to think about that. But that is the way that this war ends very successfully. I would say, however, that it's not a binary between win and loss. If the United States and Israel have degraded the power of the Iranian regime, they're not as powerful a player in a future confrontation that is a general war scenario. So could, some people are suggesting that at some point, President Trump will look at everything that's been accomplished militarily, which is substantial, claim victory, and leave that part of the world. Is that a scenario you think is possible?

20:23And if so, under what time frame? Well, President Trump, I mean, we've spent years discussing his mind together. And it is another terrifying prospect. I'm not sure what he's thinking. I think that he could very well act like a wounded tiger at this point. He's an elderly gentleman. He's going to be out of power, if not office in November. And so I think he's thinking this is my last chance to make a splash. And he may very well move up that escalatory ladder simply through vanity. It's an ugly thing to say, but I think he might do that. That would be my bet. But again, he might get distracted by something else.

20:57I mean, Rubio was talking about Cuba, and Trump is always thinking about things like ballrooms. So there's another sort of ADHD scenario here where he just loses interest. Yep.

21:07Scarlet Fu:What about oil prices? We see oil prices surge, and they're up, I think, 90 % so far since the start of the war. How does this go? I mean, even if the US decides to come up with the definition for victory and retreat in any way or wind things down. And Trump says we got what we wanted. If oil prices stay elevated because Iran controls the state of Hormuz, how does that shake out for not just the global economy, but for geopolitics, for who's got leverage, who doesn't? Bad for the economy. JP Morgan just released an excellent report, which is kind of like a doomsday scenario, if oil goes anywhere near 150, 180.

21:47But it's also bad for China. So we talk a lot about how this is good for Russia because their oil revenue is funding their war in Ukraine. I imagine that's true, at least in the short term. But China gets a lot of its oil, a lot of its energy out of that area. And so one scenario is that China decides, look, enough is enough, and communicates with the Americans to try and wind this thing up. It's also not in European interests. So I'm always cautious of what I think about as the financialization of geopolitics and strategy. Yes, the economists are right to warn us about the price of oil. But I think that's an independent variable.

22:20I think the most important thing is Western security. And at the end of the day, like I say, the Iranians have been at war with us for effectively 50 years, and now we're fighting back. So if the U.S., if President Trump were to claim victory and cease operation, is it a fair assumption that Israel will follow our lead? I have absolutely no idea. I don't think Israel follows anybody's marching orders. If anything, we've followed theirs to some extent in the timing and nature of this operation. I don't think that's necessarily a bad thing because Israel is a foundational ally of the United States and of the West and is effectively fighting people in that region that would otherwise be in Europe or in the United States.

23:02It's that simple. But I am not an analyst of Israel and I would defy anyone who claims they are to guess at the next move. I mean, look at the pager thing. Nobody saw that kind of behavior coming. So no idea.

23:16Scarlet Fu:What are you thinking? How are you preparing yourself, bracing yourself for what could come? What's on your mind as we enter into the second month of this war? We are struggling to describe World War III. Gary Kasparov calls it World War IV because the Russians think of World War III as being the Cold War. I've called it the Central War. Ukraine and Iran is one war. But this is a global conflict. It only gets worse. It only gets bigger. And that's why with that very zoomed out lens, I look at what's going on in Iran and think, on balance, this is the thing to do. Again, I repeat myself, if we had waited, if we had just sat in that boiling water like a frog and waited for a much more coordinated attack through these three powers, we could have been overwhelmed.