Air Canada Second Trip to C.C.A.A.?

[rudder]

850 raised @ 10-15 mil burn per-day gone in 2-3 mos
Hope it gets better sooner rather than later but I honestly can’t see it being a summer where everyone wants to travel just yet.

Q4 2020 cash burn rates cannot be sustained. Q1 2021 will not see much improvement. One would assume that AC is hoping to see daily cash burn rates halved by the end of Q2 2021.

Right now it is all about the revenue side of the equation. Current passenger volume sitting at 8% of pre-COVID levels. Some variable expenses (fuel/wages) have been mitigated, but a significant amount of overhead represents a fixed expense (notwithstanding deferred lease payments that will have to be repaid over time).

Revenue recovery is the key. Get out your crystal ball to estimate when and by how much. There is also the issue of yields, if it is just the low margin leisure segment that recovers first.

[flyingcanuck]

850 raised @ 10-15 mil burn per-day gone in 2-3 mos
Hope it gets better sooner rather than later but I honestly can’t see it being a summer where everyone wants to travel just yet.

Q4 2020 cash burn rates cannot be sustained. Q1 2021 will not see much improvement. One would assume that AC is hoping to see daily cash burn rates halved by the end of Q2 2021.

Right now it is all about the revenue side of the equation. Current passenger volume sitting at 8% of pre-COVID levels. Some variable expenses (fuel/wages) have been mitigated, but a significant amount of overhead represents a fixed expense (notwithstanding deferred lease payments that will have to be repaid over time).

Revenue recovery is the key. Get out your crystal ball to estimate when and by how much. There is also the issue of yields, if it is just the low margin leisure segment that recovers first.

Wow, I assumed these stats were at the start of the pandemic, I assumed it would have came up a bit since then.

[goldeneagle]

Revenue recovery is the key. Get out your crystal ball to estimate when and by how much. There is also the issue of yields, if it is just the low margin leisure segment that recovers first.

Barring refunds happening, then the majority of the leisure travel in 2021 will not produce revenue, just using up credits, and a bunch of that may spill over into 2022 as well. Possibly flying a bunch of full airplanes around, but only collecting money for 25% of the seats.

[brooks]

How many more rounds of funding are needed to keep the ship afloat? AC stock is going back to low teens at best.

[altiplano]

How many more rounds of funding are needed to keep the ship afloat? AC stock is going back to low teens at best.

The whole industry is at risk... and brooks is out hatin' on AC... what's new?

At least I won't be wearing a pink tie or whatever it is... good luck with that.

[RRJetPilot]

How many more rounds of funding are needed to keep the ship afloat? AC stock is going back to low teens at best.

At what point does a Private Equity Firm cut its losses keeping the ship afloat? Westjet will be replaced with Swoop and you will be hating on AC even more when your pay is less than a Costco Sample Brand Ambassador. Good luck Brooks!

[brooks]

I have no hate on for AC as you assume. AC will get its standard tax payer funded bail out and continue being bloated and privileged. I guess you feel triggered and need to pull out the pink tie, and Costco jokes because I start bringing out the financial facts. Enjoy yet another B pay scale.

[altiplano]

I have no hate on for AC as you assume. AC will get its standard tax payer funded bail out and continue being bloated and privileged. I guess you feel triggered and need to pull out the pink tie, and Costco jokes because I start bringing out the financial facts. Enjoy yet another B pay scale.

Making things up now... whatever makes you feel better about yourself brooks. Careful throwing stones in your own glass house...

[pigboat]

I have no hate on for AC as you assume. AC will get its standard tax payer funded bail out and continue being bloated and privileged. I guess you feel triggered and need to pull out the pink tie, and Costco jokes because I start bringing out the financial facts. Enjoy yet another B pay scale.

Here are a few FACTS you can chew on. TCA wa set up as an independent division of the CN railway back in 1937. Until the Crown Corporation was sold off to become a Private Company there was a fair amount of Government funds invested. When Air Canada was sold off ; the Government got it;s investment back. That makes it the ONLY Crown Corporation that ever turned a profit. As a private Company under CCAA almost 20 years ago, the Federal government did back loans so Air Canada would survive and 100% of those loans were repaid.

The whole Aviation industry in Canada will need help to come out the other end. I expect once Covid ends, it will take the Canadian avaition industry 3 or 4 years to get back to the needed Capacity. The damage is extreme and most Countries have given their Carriers considerable help long before now. The Feds have taxed aviation as the biggest cash cow they have ever seen for decades. The real issue is the whole Canadian Aviation segment and not just AC.

[Torontomaplelaughs]

Brooks is by far one of my favs on here.

It just never gets old

[Raymond Hall]

Aside from the huge human impact of COVID, there are so many other impacts, not all of which are negative.

For one, by necessity, business has been forced to embrace technology on an exponentially accelerated basis. As an investor, I would be avoiding all downtown commercial real estate investment because every single business has now been forced to realize, out of necessity, that business, as we knew it, has moved on, virtually. We don't need a huge office with an army of support staff!

In the coming months, for example, I have several court hearings scheduled, none of which will require travel of the lawyers or judges in Montreal, Ottawa and Vancouver. It will all be conducted on-line. All of my law annual training requirements (the equivalent of ART for pilots) is now conducted on-line. All of my scheduled court hearings are now scheduled on-line. It will not be long, in my view, before jury trials will be conducted on-line. Everything, from home!

[digits_]

In the coming months, for example, I have several court hearings scheduled, none of which will require travel of the lawyers or judges in Montreal, Ottawa and Vancouver. It will all be conducted on-line. All of my law annual training requirements (the equivalent of ART for pilots) is now conducted on-line. All of my scheduled court hearings are now scheduled on-line. It will not be long, in my view, before jury trials will be conducted on-line. Everything, from home!

Does that mean you get to charge your client per megabyte bandwidth used instead of mileage?

[L39Guy]

Here are a few FACTS you can chew on. TCA wa set up as an independent division of the CN railway back in 1937. Until the Crown Corporation was sold off to become a Private Company there was a fair amount of Government funds invested. When Air Canada was sold off ; the Government got it;s investment back. That makes it the ONLY Crown Corporation that ever turned a profit. As a private Company under CCAA almost 20 years ago, the Federal government did back loans so Air Canada would survive and 100% of those loans were repaid.

This isn't quite accurate. When the federal government privatized AC in the mid-1980's (first tranche) and the early 1990's (second tranche), they left AC virtually debt free (all of the aircraft were paid off, i.e. B767's, B727's, DC9's, etc.) and also bankrolled them with about $1.4 billion in cash. At that time, the federal government (Mulroney administration) was running about $50 billion deficits which, in today's dollars, is a lot of money and eclipses what the Trudeau government was doing pre-COVID. In other words, the long-suffering taxpayers of Canada could have really, really used the money.

Using the equity of the unencumbered aircraft, AC did a number of sale-leasebacks to raise cash to get through the recession of the early 1990's (and try to run Canadi>n Airlines out of business using, er, essentially tax payers money).

[ayseven]

There is nothing a big, dominant corporation hates more than competition. The only difference between those and the small business, is they can afford to do something about it. I always figured if things kept rolling in, why get greedy? Of course, I was just naive, because there is always somebody trying actively to put you out of business, no matter how successful they are.

[Raymond Hall]

Does that mean you get to charge your client per megabyte bandwidth used instead of mileage?

What it means, practically speaking, is that you almost never meet your clients. Hardly any more face to face meetings. For all that your clients know, could be on Mars.

And, as Jeffrey Toobin recently found out, you have to be very, very careful about your technology.

I now keep my web camera face down on my desk until I need to use it for a meeting, and then place it on top of the screen only for so long as I need it for the meeting. And I don't have devices such as Alexa or any other intrusive technology that can monitor my private conversations. The pervasiveness of existing technology opens up entirely new issues about the lives we live, including our rights and duties to protect our privacy and confidentiality.

[brooks]

History has a funny way of repeating itself. Instead of buying an airline started from CP Rail you are buying another Montreal based bloated whale. Between Bombardier, and SNC Lavalin, and AT once again Canadian Taxpayers money is being dumped into failing Liberal strongholds. Consider yourself in a safe and secure position at AC.

[altiplano]

You angry Bro?

[Rockie]

History has a funny way of repeating itself. Instead of buying an airline started from CP Rail you are buying another Montreal based bloated whale. Between Bombardier, and SNC Lavalin, and AT once again Canadian Taxpayers money is being dumped into failing Liberal strongholds. Consider yourself in a safe and secure position at AC.

I must have missed something, is the government buying AT for AC as a gift? Wow...best Christmas ever.

[brooks]

Let's call a spade a spade. AC buys AT so the government doesn't have to bail them out. In return you get a bail out in exchange for a large share of the company. Same old sh!t

[Rockie]

Let's call a spade a spade. AC buys AT so the government doesn't have to bail them out. In return you get a bail out in exchange for a large share of the company. Same old sh!t

Again, did I miss something? Air Canada's initial offer was before Covid dragged everything down and AT was doing pretty good as reflected in the price offered by AC. The offer isn't for a large share of AT, it's for all of it, and so far there's been no bail out on the horizon for AC. Nor do they particulary want one. They'd be ecstatic if the government simply put in the same kind of testing/quarantine protocols other countries have to allow them to do business.

If you have evidence to the contrary I'd love to see it.