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Air Canada
Standard & Poors, May 2011
Abstract
Substantial lease-adjusted debt and weak balance sheet Participation in cyclical, capital-intensive, and price-competitive airline industry Near-term operating pressure from rising fuel costs and competition from low-cost domestic players Higher cost structure relative to other North American legacy airline operators Somewhat limited financial flexibility, with no general committed bank revolving credit and few unencumbered assets for sale, secured borrowing, or sale-leasebacks Dominant and defendable market position, particularly in the domestic market Stronger revenue yield compared with that of peers Cost-saving initiatives and proactive fleet/capacity management should improve competitiveness Improved liquidity and cash flow relative to recent history The ratings on Canada-based Air Canada reflect what Standard & Poor's Ratings Services views as the company's 'highly leveraged' financial risk profile characterized by...
Companies mentioned in this report are: Air Canada
Action: Review
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Full Analysis
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