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IATA forecasts 2009 losses in the airline industry of over $10 b.
Air Canada raises $1.02 billion
Friday, July 31, 2009
Air Canada announced that it has entered into arrangements to raise a total of CAD $1.02 billion in additional liquidity through a series of financings and other transactions with certain lenders and key stakeholders.
“By any measure, raising $1 billion in new liquidity is a tremendous achievement, particularly in view of current credit markets and the state of the airline industry,” said Calin Rovinescu, President and Chief Executive Officer. “This positive outcome was the result of the determined efforts of our leadership team and support of our key stakeholders, including our employees, retirees, unions, major shareholder, key aircraft lessors and suppliers, loyalty partner and others. With these financings and other transactions, the pension funding moratorium and new pension deficit funding arrangements, as well as the 21-month extensions to our collective agreements on a cost neutral basis, we have strengthened our position to manage through this extremely difficult period for the airline industry.
“IATA forecasts 2009 losses in the airline industry of over $10 billion. With ongoing global economic weakness and significantly lower airline revenues, we still have much work to do to adapt to the profound impact of this recession. The $1 billion of new liquidity will give us breathing room towards achieving sustainable profitability. This will require a fundamental repositioning of the airline with a focus on both cost management and a new approach to revenue generation to offset the dramatic erosion in yield. I am confident in our ability to meet the challenges ahead.”
“By any measure, raising $1 billion in new liquidity is a tremendous achievement, particularly in view of current credit markets and the state of the airline industry,” said Calin Rovinescu, President and Chief Executive Officer. “This positive outcome was the result of the determined efforts of our leadership team and support of our key stakeholders, including our employees, retirees, unions, major shareholder, key aircraft lessors and suppliers, loyalty partner and others. With these financings and other transactions, the pension funding moratorium and new pension deficit funding arrangements, as well as the 21-month extensions to our collective agreements on a cost neutral basis, we have strengthened our position to manage through this extremely difficult period for the airline industry.
“IATA forecasts 2009 losses in the airline industry of over $10 billion. With ongoing global economic weakness and significantly lower airline revenues, we still have much work to do to adapt to the profound impact of this recession. The $1 billion of new liquidity will give us breathing room towards achieving sustainable profitability. This will require a fundamental repositioning of the airline with a focus on both cost management and a new approach to revenue generation to offset the dramatic erosion in yield. I am confident in our ability to meet the challenges ahead.”
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