Air Canada seeks 777 delivery financing

Washington DC
Source:
This story is sourced from Pro
See more Pro news »

Air Canada is evaluating financing options for three Boeing 777-300ER deliveries that are scheduled for 2013.

The Montreal-based carrier anticipates C$750 million ($754.6 million) in capital expenditures for the 777 aircraft next year, says Michael Rousseau, chief financial officer of Air Canada, during an earnings call today. It will close financing for the aircraft before the deliveries begin, he says.

Air Canada has orders for five 777-300ERs with deliveries scheduled for the second half of 2013 and the first quarter of 2014, and for 37 787-8s with deliveries beginning in 2014, according to a financial release.

The airline closed financing to cover between 80% and 90% of the costs of 31 787s from Boeing and the engine manufacturer in 2011.

Air Canada had C$2.38 billion in cash and short-term investments at the end of June, which is up 5.8% from C$2.25 billion at the end of March. It had C$2.26 billion in cash and short-term investments at the end of June 2011.

It had C$3.77 billion in long-term debt and finance leases at the end of June, which is down 2.8% from C$3.88 at the end of March. It had C$3.82 billion in long-term debt and finance leases at the end of June 2011.

Air Canada made C$62 million in capital expenditures that are mostly pre-delivery payments for its 777 and 787 orders during the second quarter, says Rousseau.

Rousseau says that the airline anticipates C$178 million in capital expenditure during the second half of 2012.