Air Canada focuses on cutting debt
Airline has almost $1B due in next 2 years
Montreal-based Air Canada said Thursday it will make paying down debt a priority over adding to its fleet of aircraft.
"We have almost a billion dollars of debt coming due in the next two years and certainly we would like to pay some, if not all, of that back," chief financial officer Michael Rousseau told the CIBC Eastern Institutional Investor Conference in Montreal.
Air Canada increased revenue in 2010 by redeploying its fleet more effectively.
To grow further next year, it would have to add planes, but Rousseau said it doesn't plan to do so.
"We're being very, very disciplined about adding capacity. We have route rights to virtually everywhere in the world, so we fly where we want to. But we need to make money."
The company said it expects capital spending for this year and 2011 to be just $150 million annually, not counting maintenance expenses that will be recorded under new international financial accounting rules, he said.
Rousseau said Air Canada's capital needs will start to grow in 2012, in anticipation of planned deliveries of 37 Boeing 787s, also called Dreamliners.
Air Canada is scheduled to take delivery of its first 787 in the second half of 2013.
"The airline has financing commitments already in place of $3.1 billion, covering 31 of the 37 expected deliveries," Rousseau said.
On the Toronto Stock Exchange, Air Canada B shares closed down three cents at $2.81.