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Air Canada plans EETC issue for 2018 deliveries

Air Canada plans to tap the enhanced equipment trust certificate (EETC) market to fund some of its 21 aircraft deliveries in 2018, says chief financial officer Michael Rousseau.

"We continue to look at our options, however, we are highly likely to tap into the EETC market," he says during the Montreal-based carrier's third quarter earnings call today.

Air Canada has C$1.67 billion ($1.31 billion) in aircraft capital commitments in 2018, a quarterly financial statement shows. It is scheduled to take 16 Boeing 737 Max 8 and five Boeing 787-9 aircraft during the year.

The airline has indicated previously that it was considering a EETC issue for its 2018 aircraft deliveries, however, it has yet to tap the market.

Air Canada has issued two EETCS in the past, its $537 million 2015-2 notes in December 2015 and its $1.03 billion 2015-1 notes that March.

The carrier is scheduled to take delivery of three aircraft – its first two 737-8s and one 787-9 – in the fourth quarter, says Rousseau. It plans to pay cash for the C$169 million in capital commitments for these aircraft.

Cash, cash equivalents and short-term investments decreased 2.2% to C$4.14 billion during the third quarter, the financial statement shows. Cash was up 20.7% in September from a year earlier.

Long-term debt and finance leases decreased 5.6% to C$5.56 billion during the three months ending in September. Debt was down 12.4% year-over-year.

Air Canada prepaid $27 million in debt related to one Airbus A330 in the third quarter.

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