Originally Posted by
The Lev
Not sure how Cage can arrive at any conclusion about there being no increase in capital requirements.
The no increase in capital requirements came from WestJet (Saretsky and Walker - WS Controller) as mentioned multiple times on the q1-2017 conference call.
Yeah I thought it was a little strange as well.
On further reflection the no increase in capital requirements could be a signal that WS will finance some of the purchase through sale an lease back of 5 aircraft. Pre adjustment to Lease Accounting rules (which don't take affect until 2019), WS plan could involve operating leases to keep their debt to equity ratio below 2.5:1, this is a self imposed limit on the amount of borrowing. In 2019 there will be an accounting change to force all companies to account for leases as finance transactions. But as WS has not early adopted the new standard, they must utilize the existing accounting treatment.