Tuesday, March 24, 2020

Is Air Canada (TSX:AC) Headed for Bankruptcy?

Here is the article.

At the end of Q4, Air Canada had almost $6 billion in cash, as well as undrawn credit lines of $7.4 billion. Net debt (debt minus cash) was just 78% of 2019 EBITDA, while free cash flows for the year came in at $2 billion, up from $1.3 billion the year prior. In terms of its pension, Air Canada was in a surplus position of $2.5 billion as of January 1, 2019, though we can expect this to decrease once it gets revalued later this year owing to lower interest rates.


Financial data


$6 billion in cash
undrawn credit line of $7.4 billion 
Net debt was just 78% of 2019 EBITDA (?)
free cash flow - 2 billion
2019 free cash flow - 1.9 billion
$2.5 billion as of Jan. 1, 2019

the airline’s 89 aircraft 

IATA estimate the airline industry is facing an unprecedented loss of $113 billion in passenger revenues. 


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