RBC update on Air CanadaAn RBC update on Air Canada which is, to a degree, applicable to CHR.. Air Canada Rating: Price Target: Outperform 23.00 25.00 Updating price target for new financing We believe that the recent equity and debt raise by AC serves two key purposes: (1) reduces concerns around liquidity in the near-to-medium term; and (2) provides AC with the financial flexibility needed to navigate the eventual demand recovery. While the issue was dilutive (price target to $23 from $25), we see the offering as beneficial to long-term viability. Additional financing further bolsters liquidity. Following the offering, we see total available liquidity amounting to ~$9.5B (excl. financings from unencumbered assets), which we believe provides the company with significantly more staying power under a more bearish COVID-19 scenario. Furthermore, we see daily cash burn rates peaking in Q2/20 before moderating until a return cash flow breakeven is achieved in 2022. Focus now shifts squarely to the demand recovery. We envision both a demand and share price recovery scenario materializing in two stages, with the first being the removal/easing of the liquidity/going-concern risk discount being applied by the market and the second pertaining to a definitive resolution of the pandemic (likely through the creation of a successful vaccine). That said, we believe ACs new flight schedule looks to align with the anticipated demand recovery and we would expect the stock to move in parallel as demand continues to come back.