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02:47 PM EDT, 05/20/2020 (MT Newswires) -- The effect the COVID-19 pandemic is having on air travel demand is much worse than expected in March 2020, S&P Global Ratings said Wednesday, adding it estimates Air Canada's (AC.TO) capacity to be down 50% to 60% this year and forecasting the company will generate a free operating cash (FOCF) deficit of C$3.5 billion to C$4 billion this year with traffic unlikely to recover to 2019 levels until at least 2023. As a result, S&P expects adjusted funds from operations (FFO) to debt to be negative in 2020 and improve to between 15% and 20% in 2021. Therefore, S&P Global Ratings lowered most of its ratings on Air Canada by one notch, including its issuer credit rating on the company to 'BB-' from 'BB'. S&P said all the ratings remain on CreditWatch with negative implications, where they were placed March 20, to reflect the high degree of uncertainty about the timing of Air Canada's recovery from the effects of the pandemic and how severe they will be for the company. S&P expects to resolve the CreditWatch within the next several months, at which time it expects greater visibility regarding the effects of the outbreak on Air Canada's financial position and timing of a recovery. Price: 17.10, Change: +0.37, Percent Change: +2.21 |