Air Canada T.AC

Alternate Symbol(s): ACDVF

Industrials Airlines

Air Canada is an airline company. The Company is a provider of scheduled passenger services in the Canadian market, the Canada-United States (U.S.) transborder market and the international market to and from Canada. It provides scheduled service directly to more than 180 airports in Canada, the United States and internationally on six continents. The Company’s Aeroplan program is Canada's premier travel loyalty program, where members can earn or redeem points on the airline partner network of 45 airlines, plus through a range of merchandise, hotel and car rental rewards. Its freight division, Air Canada Cargo, provides air freight lift and connectivity to hundreds of destinations across six continents using its passenger and freighter aircraft. Its Air Canada Vacations is a tour operator, which is engaged in developing, marketing, and distributing vacation travel packages in the outbound/inbound leisure travel market. Air Canada Rouge is Air Canada's leisure carrier.

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Air Canada > Summer Capacity

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Post by airlineinvestoron Sep 17, 2021 3:24pm

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Post# 33878910

Summer Capacity

From Air Canada 2019 Q3 MD&A, and 2021 Q2 MD&A and Guidance:

In Q3 2019 the Airline flew 32,457 million Available Seat Miles (ASMs) – the capacity measure – with 251 airplanes, of which 106 were wide-bodies and 145 were narrow-bodies (end of Q2 2019 fleet size and make-up).

In Q2 2021, the Airline in its forward guidance indicated it planned to fly only 35 percent of 2019 ASMs, or about 11,360 million ASMs (.35 x 32,457).

At the end of Q2 2021, the Airline’s passenger fleet size comprised 196 aircraft, of which 67 are wide-bodies and 129 are narrow-bodies.

Note:

There are actually 78 wide-body aircraft in Air Canada’s fleet, but eleven passenger aircraft have been re-configured to carry cargo (7-Boeing B777s representing about 30 percent of the total B777 fleet and 4-Airbus A330s representing 25 percent of the total A330 fleet). The eleven ‘cargo’ aircraft would not form part of the Q3 ASM total, as this is a passenger capacity measure.

So, according to the Q3 2021 MD&A and Guidance, Air Canada is flying only 35 percent of its 2019 Q3 capacity, yet utilizing 78 percent (196/251) of the passenger aircraft operated in Q3 2019. (In terms of wide-bodies vs narrow-bodies, there are fewer wide-bodies – 63 percent (67/106) of 2019 W/B aircraft – and 89 percent (129/145) of 2019 N/B aircraft.)

In view of management’s goal to minimize cash burn as the Airline exits the crisis, this doesn’t make sense. So the question is, are these aircraft fully utilized?

No they are not, but in speaking with a B777 Captain (a neighbour) earlier this week, he mentioned that B777 Captains are flying 85-hour blocks (a typical normal summer flying block) while Captains on the remaining fleets are flying in the 72-73 hour range, about 85 percent of the monthly flying hours normally flown in Q3. (The B777 is understaffed in the Captain’s seat due to retirements, and flying requirements are being met through overtime.)

As a (very) high level approximation, if we take the 2019 summer capacity in ASMs and multiple that by the percentage of fleet size compared to 2019 (adjusted lower for fewer wide-body aircraft in the fleet) and then multiply that by the pilot flying hours flown vs what they normally would fly, we get about 60 percent of 2019 capacity:

32,457 x 72 percent x 85 percent = 19,800

This all points to a summer operation that is much more robust than indicated in the Company’s forward guidance, conservatively above 50 percent, and likely closer to 60 percent. And this does not include cargo capacity (and revenue) from the eleven wide-body ‘cargo’ aircraft.

My analysis supports the information contained in Rouge10’s post yesterday and in thinkyourmoney’s post today (both links provided below). Have a great weekend!

RE:RE:RE:Bankruptcy: Wishful thinking Vs Facts

https://stockhouse.com/companies/bullboard/t.ac/air-canada-inc?postid=33867881