Air Canada raises $1.2 billion to keep flying in pandemic
MONTREAL, Canada – Air Canada raised nearly Can$1.6 billion (US$1.2 billion) from the issue of new stocks and debt in order to keep flying through the pandemic, the nation's flagship carrier announced on Tuesday, June 2.
The cash injection comes after the global aviation industry came to a halt as international borders closed in March to limit the spread of the new coronavirus, leading to massive job cuts and pushing some carriers into bankruptcy.
Chief executive Michael Rousseau said it was a "strong endorsement" of the Canadian airline, which started 2020 in a strong financial position but took a hit over the past 3 months.
Some 90% of its 1,500 daily flights were canceled, forcing it to lay off more than 19,000 staff, or half of its workforce.
Rousseau noted that "government-imposed quarantines and border restrictions destroyed demand and depleted cash."
The nearly Can$1.6 billion was raised through an offering of shares and convertible senior notes.
The company said the cash would provide it with "additional flexibility both from an operational standpoint and in the implementation of its planned mitigation and recovery measures in response to the COVID-19 pandemic."
The International Air Transport Association estimated last week that global airlines will lose US$314 billion in 2020 revenues, a 55% dive from last year.
On Monday, June 1, the International Civil Aviation Organization published a series of health recommendations for the pandemic-hit airline industry as it relaunches air travel.
They include requiring travelers wear face masks and get temperature checks at airports. – Rappler.com