DJ: Air Canada Liquidity Concerns At Fore As Iraq War Looms
Jan 24, 2003 | 3:17 pm
#1
Original Poster
Join Date: Feb 2000
Posts: 364
DJ: Air Canada Liquidity Concerns At Fore As Iraq War Looms
Jan 24, 2003 | 3:32 pm
#2
FlyerTalk Evangelist
Join Date: Mar 2000
Location: Southern Alberta
Posts: 20,547
Interesting article.
I was thinking this am about starting a thread: Is AC in trouble?
AC needs cash to meet debt obligations in the fall. Fuel cost are high; traffic is down. Fixed costs are high.
The situation is not good.
I was thinking this am about starting a thread: Is AC in trouble?
AC needs cash to meet debt obligations in the fall. Fuel cost are high; traffic is down. Fixed costs are high.
The situation is not good.
Jan 24, 2003 | 4:34 pm
#3
Join Date: Jun 2002
Posts: 5,284
I've been thinking about this as well Airbus320. I don't have any tickets purchased outside of March. I know the problems will be in the fall if there is no war with Iraq but who knows?
Is anyone else worried about AC's stability? Would the government really let them go under? Despite the arguments about WJ and other airlines, they really are the only option for many business travelers and tourists who come to Canada for direct flights across the country.
Thoughts anyone?
Is anyone else worried about AC's stability? Would the government really let them go under? Despite the arguments about WJ and other airlines, they really are the only option for many business travelers and tourists who come to Canada for direct flights across the country.
Thoughts anyone?
Jan 24, 2003 | 5:12 pm
#4
Join Date: Apr 2000
Posts: 3,234
There are people on Parliament Hill who would love to see Air Canada fail.
But that's not likely to happen, at least in the next year or so. There's a lot more they can sell to raise money. The question is how much is the $400-million debt payment going to hurt them this summer. Especially if they lose a bundle in the first two quarters this year.
But that's not likely to happen, at least in the next year or so. There's a lot more they can sell to raise money. The question is how much is the $400-million debt payment going to hurt them this summer. Especially if they lose a bundle in the first two quarters this year.
Jan 24, 2003 | 5:22 pm
#5
Join Date: Jul 2001
Location: Europe
Posts: 2,014
That why I was asking if they should do a filing now, when things are uncertain. It would put the bricks to the security fee, which will be getting trimmed back, allegedly, and the government would have to stand back and watch.
http://www.flyertalk.com/forum/Forum5/HTML/007988.html
It would not be a big panic, just a "chance to reorganize in the face changes in the competitive environment that has resulted from the massive changes that have occured in our industry in the last year" - see, I can write just like an AC "media release"!
US, UA, perhaps American, why not AC? They can say it will "keep them competitive."
http://www.flyertalk.com/forum/Forum5/HTML/007988.html
It would not be a big panic, just a "chance to reorganize in the face changes in the competitive environment that has resulted from the massive changes that have occured in our industry in the last year" - see, I can write just like an AC "media release"!
US, UA, perhaps American, why not AC? They can say it will "keep them competitive."
Jan 24, 2003 | 5:30 pm
#6
Join Date: Sep 2002
Location: YYZ
Programs: Aeroplan E
Posts: 566
The C$12 billion dollar debt is among the highest in the world. I am not sure how many carriers have similar debt in that range. The huge $400 million payment also will be due this year. And these types of installments will only get worse not better. 
I do hope AC can restructure itself, with a better staff morale... If the staff are depressed, the Airline will find it very difficult to get out of its current funk...
I do hope AC can restructure itself, with a better staff morale... If the staff are depressed, the Airline will find it very difficult to get out of its current funk...
Jan 24, 2003 | 5:39 pm
#7
Join Date: Jul 2001
Location: Europe
Posts: 2,014
From a business standpoint, it would be pretty irresponsible of them to not file this quarter. I understand the summer trans-atlantic bookings are really strong, as in high margins and very good pre-sales, which would help swing a pre-arranged reorganization.
To get there in the first place, they would need to convince a judge that the debtload, current debt, and immediate outlook is so bad they need to do this, yet that the future has a brighter outlook, if things were reorganized.
To get there in the first place, they would need to convince a judge that the debtload, current debt, and immediate outlook is so bad they need to do this, yet that the future has a brighter outlook, if things were reorganized.