Air Canada Raises Cash Amid Falling Profit

Air Canada may be able to raise as much as 800 million Canadian dollars by leasing and selling back aircrafts and other inventory, according to their report on Friday following their profit for the 2nd quarter falling by 21% because of the soaring price of fuel. As the largest airline in the country, Air Canada has counted the worth of many of their assets and will begin focusing their efforts during the upcoming months on finding out how much cash they need to get in the middle of these hard times across the aviation industry, according to Michael Rousseau, the Chief Financial Officer.

The airline’s move comes as they prepare to reduce their capacity by 7% for the autumn and winter seasons and cut 2,000 jobs in order to deal with the amazingly high cost of fuel and decreased demand for air travel, especially throughout the US. Rousseau told analysts that they are planning on spending a large amount of time taking a look at that during the next few months. He didn’t give any details of the structure or timing of any transactions. However, he continued, they have obviously done their homework in determining what the conditions of the market are and what is available to them, so they will take the opportunity when it shows itself.

Air Canada had short-term investments and almost 1.5 billion Canadian dollars in cash by the 2nd quarter’s end to draw on, which is lower than last year’s 1.8 billion Canadian dollars. Montie Brewer, the Chief Executive of Air Canada, said that the results from the quarter show the difficulty of increasing revenues to match the quick pace of the rising fuel costs. However, he continued, their passengers will eventually be made to absorb that higher cost.

Find out more at: www.aircanda.com