Air Canada T.AC

AC: How AC performed to narratives

[Rouge10]

Since COVID started, shorts have been trying to build narrative after narrative by fear mongering. And each one of those narratives have proved to be incorrect and AC has surpassed annual targets everytime.

Here is a quick summary of previous, current and future narratives. Sadly (for shorts), each of these will be proved incorrect. 

Year	Shorts Narrative & accuracy		Rational Analysis	Action	Outcome
2020	AC will be bankrupt in 2020. World is coming to an end	Bankruptcy in 2020: INCORRECT	Could surive for 2 years with current revenue	Quick reduction in capacity/cost. Raised cash from debt and equity offering. Maximized Cargo capacity/revenue, Others	Survived easily, raised cash and controlled cash burn
2021	AC will be bankrupt in 2021. Travel will be restricted for years	Bankruptcy in 2021: INCORRECT	Could surive for 3 years with current revenue	Capacity alignment, Employee reduction (Post CERB), Credit card volume increase, Prepared for future travel operating model	Survived easily, reduced cash burn and set up for 2022 travel opening
2022	Bankruptcy eminent eventually. COVID will return.	COVID will return : INCORRECT	Demand will return, Cash burn will reduce to 0.	Slow opening of travel, optimal capacity to cater to demand. Focus on key routes. Placed acft orders to prepare for future operating strategy	Breakeven achieved. H2 was cash positive.
2023	AC will loose billions. Demand won't return. Recession is coming	Demand won't return. Cash burn to continue : INCORRECT	Pent up demand. AC will follow US airlines. Yield will be high. Record cash flows	Optimal capacity deployment. Focus on margins. Added employees for future. Focus on premium business.	Record CFO and FCF. LR of 1.1 .$3b reduction in debt. Placed order for better acft
2024	Market crash, recession in Canada, large Capex, pilot strike will kill the airline	Pilots strike: Won't happen	Capacity still lower than 2019, strong immigration numbers, international focus (intl travel % is higher than ever), efficient fleet, higher margins, no pilot strike, just negotiations.	Focus on margin, young, efficient and optimal fleet, flexbility in capacity, strengthening loyalty program, focus on intl and 6th freedom (reduce dependence on domestic market, optimal network/fleet reaching countries of immigration, taking competition head on. Focus on consistent FCF in coming years	Record Q1 FCF, LR ~ 0.9, Investor grade in sight, financially strongest airline in North America, getting ready to return capital to shareholders. Back to 2019 Financial health
2025+	Canada in huge recession, Interest rate and property value decrease together!!, Competition thrives and AC suffers, etc...	Recession: FCF will conitnue	If economy holds, rates stay high, If rates go down, property market stablizes (other constraints). Both scenarios good for AC. Travel market will catch up on missed demand growth in last 5 years.	Focus on margin, flexible capacity, efficient and optimal fleet, maximize tools at hand to compete effectively	Forecast: Return capital to shareholders, consistent FCF every year, enhanced margins.

AC stock will soon see gradual and consistent rise Q after Q. There is no disruption over summer. And even after June 1st, there will be time till mid September to wrap up negotiations.

AC will continue to be financial powerhouse with captial returning to shareholders consistently. AC will surpass 2019 peak.

[Rob8043]

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[TradeForex]

That pretty much sums up the RoBOT's limited scripts.

[StuffMyBunghole]

Just more Blah Blah Blah from the SHARTING Bot. This Robbie dude needs some imodium.