MONTREAL- Air Canada (AC) disclosed that it has successfully paid approximately $589 million in debt related to aircraft acquisitions. The repayment included the settlement of a $462-million loan from Canada’s Export Development Corporation, which was originally secured to fund the acquisition of 14 Airbus A220-300 aircraft.
Additionally, the airline completed a $127-million partial repayment on financings that received support from the Export-Import Bank of the United States, which had been utilized for the acquisition of four Boeing 787-8 aircraft.
Air Canada Pays Debt
Air Canada has identified debt reduction as a top priority in the wake of the pandemic, emphasizing its commitment to enhancing its financial stability and creating room for strategic investments.
The recent repayments have significantly bolstered the airline’s balance sheet and enhanced its capacity to pursue strategic opportunities.
John Di Bert, Chief Financial Officer of Air Canada, stated, “With our substantial liquidity and strong cash flow, we will continue to seek additional avenues to reduce our debt further.”
In the quarter ending on June 30, Air Canada reported a profit of $838 million, a notable improvement from the $386 million loss during the same period the previous year.
Walter Spracklin, an analyst at RBC Capital Markets, lauded these debt repayment measures, considering them prudent actions, especially in light of recent surges in fuel prices and potential fluctuations in air travel demand.
In a note to clients, he expressed optimism about the company’s financial strategy.
Revamping Fleet
Over the last three months, flag carrier Air Canada (AC) has obtained three widebody aircraft as part of its strategic fleet adjustments for summer 2023 to enhance its long-haul operations.
In April, the carrier acquired a Boeing 777-300ER airplane featuring GE90 engines from one of its lessors. AC previously operated this aircraft but returned to the lessor in 2021.
“AC has expressed its intention to return the aircraft to service for commercial operations before the summer of 2023,” the airline stated.
The aircraft was originally delivered to Air Canada in 2007. But subsequently sold to Aircastle in 2013 as part of a sale and leaseback transaction.
The Canadian airline has been encouraged by the strong demand reflected in its first-quarter results.
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