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.

TSX:AC - Post by User

Air Canada > CAPEX will take all PROFITS

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Comment by alive9wellon Feb 16, 2024 5:55pm

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Post# 35885216

RE:RE:CAPEX will take all PROFITS

For a change, there is actually a real discussion point, CAPEX.

Rouge10 knows his AC business. He had already included this information in his most recent assessments. Also important to understand that he is providing performance metrics, not daily stock trading predictions.

Expect in longer term:

AC had recently announced large capex program for 2025/2026. Many investors would be concerned about that. But the timing of spend is carefully planned, it obvious. And if need be, such programs can be shifted by months/quarters to align with demand.
If there would be any recession/soft landing (H2 ’24), it will be over by 2025 and with strong demand and yield environment, capex will be easily manageable. And still produce substantial FCF, even in 2026, the highest planned capex year. Usually, one can expect delivery and spend schedule will be different when the time comes.
In a scenario, there is no recession, cash flow will be even stronger, way stronger than 2023.
By 2026/27, new efficient fleet (mix of replacement and growth) will be in place, enhancing the margins, leading to even stronger FCF. We should expect next 3-year targets on next investor day, though AC will take a very conservative approach. They usually under promise and over deliver.

Nordico wrote: You should have covered today. Your manic posting isn't convincing anyone.

Rob8043 wrote: Assuming it can generate healthy profits amidst backdrop of slowing demand and revenues, all profits for the next 5 years go to fund CAPEX. Remember when Rogue told you that AC has completed its aircraft purchases unlike US airliners?? LOL.
I encourage people to read MD&A and check out capital commitments noted on page 32.
This is one of the reasons why investors have been heading for the exits. Massive capital commitments in an environment that is likely to see huge declines in FCF on slowing demand, inflationary cost pressures and declines in airfare.
This stock is a STRONG SELL that will see 2009 lows.
Take your money and invest in healthy stocks!!!