After mkt today, Delta announced they were cutting capacity by 90 percent and burning $60mm a day.  That is almost half a billion every 8 days.   Delta is about 2.5x bigger than AC and has slightly higher profit margins in 2019.  

has about 2.5x the debt as AC in addition.  So not a bad proxy to use , suggesting AC burning $30-40mm a day, or $1billion/month.   

really tough to see how they rationalize closing Transat given the dynamics over next 18 months (slow return to travel post virus given recession), as the last thing they need is more capacity .  

Curious as to what fixed income instruments they own in the pension and how they will have fared as the removal of pension overhand really accrued to the equity value over past several years.  

this is tricky, as to what will be left over for the equity holder, and does the government take a big equity slab at these low prices , creating dilution concerns.   The cash burn is real and won't be recovered , so that is lost company worth for the duration of this virus lockdown.   

a well run company with enviable slots on lucrative Asian routes but remains a fixed asset heavy business with real depreciation costs and high burn costs when assets are under utilized .   


only 263 million shares out , so I can make a case for $4-5 per share or $25, contingent on duration of lockdown and state of lucrative business travel post virus (a huge variable as AC makes a fortune internationally especially with corporate contracts).

any insight welcomed.  Struggling with this one - could be a great short or long from here.  Almost impossible to invest , which explains the trading.  


good luck.