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Feb 17 (Reuters) - Air Canada (ACa.TO), Canada's biggest airline, could be forced to file for bankruptcy if it does not secure additional financing and succeed in renegotiating covenants in credit card agreements, UBS analyst Fadi Chamoun said.

Air Canada could not be immediately reached for comment.

"Notwithstanding lower fuel costs, we believe that cash from operations will be insufficient to meet rising pension funding obligations and over C$1 billion ($800 million) of debt repayment over the next two years," Chamoun said in a note dated Feb 13.

Covenants in credit card agreements could tighten further in the second quarter and result in the company being required to maintain higher cash deposits, the analyst, who downgraded the airline to "sell" from "neutral," said.

The company said on Friday it shored up its balance sheet with C$641 million in new financing, but warned that the recession may put more pressure on its revenue in 2009. Air Canada said it has up to C$1 billion of assets it could use to increase its liquidity if needed.

The company's class B shares, whose price target was cut to C$1.00 from C$1.50 by UBS' Chamoun, closed at C$1.45 Friday on the Toronto Stock Exchange.