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Air Canada has abruptly appointed Calin Rovinescu as its president and chief executive officer, making a surprise change at the top as the country's largest airline struggles to survive the recession.

Mr. Rovinescu will take over the controls at Montreal-based Air Canada effective Wednesday.

Leaving is Montie Brewer, an American who joined in the airline in 2002 and became president and CEO in 2004.

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Air Canada is facing a cash crunch, and some industry analysts have speculated that it could be forced to file for bankruptcy protection for the second time in six years.

Mounting debts, a growing pension deficit, weakening travel demand, expiring labour contracts and stiff competition from WestJet Airlines Ltd. are among the challenges awaiting Mr. Rovinescu, a Canadian lawyer who helped restructure the carrier in 2003-04. Calgary-based WestJet, which is launching an aggressive seat sale on Tuesday, has been stealing domestic market share from Air Canada over the years.

"While the challenges in front of us are large, we will continue to build upon the successes of the airline to date and deliver a quality product for our customers, employees and shareholders," Mr. Rovinescu said in a statement.

The new CEO is a co-founder of Genuity Capital Markets, an investment bank, and a former managing partner at law firm Stikeman Elliott. He obtained his law degree from the University of Ottawa in 1980.

In an interview this month, Mr. Brewer indicated that he was committed to Air Canada and wanted to devote his energy to finding ways to ease the cash pressure, including lobbying Ottawa to relax rules on pension plans.

In a statement Monday night, Air Canada chairman David Richardson welcomed Mr. Rovinescu to his new job and to the company's board of directors.

"Calin is no stranger to Air Canada, having been a senior member of the executive team from 2000 to 2004. Calin's reputation as a proven leader and his wealth of experience in corporate strategy will serve Air Canada well during this particularly challenging period for the world's airline industry," Mr. Richardson said.

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Mr. Brewer couldn't be reached for comment Monday night, but in a news release issued by the airline, he said he was proud of leading Air Canada for more than four years.

"It has been an honour to lead this great airline and I am confident Calin is the right person to take the company forward at this time," said Mr. Brewer, who replaced Robert Milton in the top executive job in late 2004.

Air Canada also named Michael Green to its board of directors, effective immediately. Mr. Green is already the lead director of ACE Aviation Holdings Inc., which owns 75 per cent of Air Canada.

Mr. Rovinescu's appointment marks the first time that a Canadian has led Air Canada since 1992, when Claude Taylor was in charge.

One of the top priorities will be addressing Air Canada's pension shortfall, which stood at $3.2-billion on Jan. 1, 2009, up 174 per cent from a $1.17-billion deficit at the start of 2008. Air Canada warns that it could be forced to contribute up to $866-million to its pension plan this year under current federal rules for payments, up from $456-million last year.

Other key issues to tackle include six-year labour contracts that will expire at the end of May and the end of June. The airline's union leaders are upset that employees had to make wage sacrifices over the years, and now face another round of fiscal restraint.

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