Posted April 14, 2009 3:06 PM
By Andy Golub
Air Canada Fleet and Financing Update
Recent management changes at Air Canada, including the return of Calin Rovinescu as the new President and CEO, have set off a swirl of speculation regarding the company's strategic vision and business plan. Mr. Rovinescu made his mark at the Air Canada during in the early 2000's, notably in the role of Chief Restructuring Officer. He was the architect of the airlines current corporate holding company structure and the key company negotiator in bankruptcy restructuring. Now that he has returned, industry analysts are pondering the implications for Air Canada.
In light of media and analyst interest, we enclose details on Air Canada's Fleet and Fleet Financing from Ascend Online, the global fleet database from aerospace data and consultancy company Ascend.
Air Canada's Current Fleet
Against this backdrop, Ascend thought it timely to provide the market with its observations about Air Canada's fleet. Air Canada currently operates 197 aircraft with 19 in storage and orders for 38 more. The fleet demonstrates an Air Canada's openness to adopting leading edge technology from a range of manufactures, rather than maintaining a single supplier orthodoxy. Air Canada operates a sizeable share of the global fleet of certain aircraft models, including, approx 3% of all A320s, almost 6% of all 767-300ERs and over 20% of all E-190s. The following table lays out the composition of the whole fleet in greater detail:
Type |
| Total In Service | Total In Storage | Current Total | Total On Order | Grand Total |
Airbus | A320 family | 82 | 1 | 83 | 0 | 83 |
Airbus | A330 | 8 | 0 | 8 | 0 | 8 |
Airbus | A340 | 0 | 1 | 1 | 0 | 1 |
Boeing | 767-200s | 0 | 17 | 17 | 0 | 17 |
Boeing | 767-300ERs | 30 | 0 | 30 | 0 | 30 |
Boeing | 777-200LRs | 6 | 0 | 6 | 0 | 6 |
Boeing | 777-300ERs | 11 | 0 | 11 | 1 | 12 |
Boeing | 787 | 0 | 0 | 0 | 37 | 37 |
Embraer | 175 | 15 | 0 | 15 | 0 | 15 |
Embraer | 190 | 45 | 0 | 45 | 0 | 45 |
|
| 197 | 19 | 216 | 38 | 254 |
Fleet Ownership Air Canada owns or manages just over 50% of its planes or 57% of its fleet, by market value. The remaining half is spread across a number of aircraft managers. In addition to Air Canada, the top 10 aircraft managers are listed below:
Manager Market Value % of Fleet Air Canada 3,462.7 57.0% GECAS 1,121.2 18.5% BOC Aviation 394.5 6.5% Babcock & Brown Aircraft Management LLC 253.2 4.2% ILFC 252.0 4.1% ORIX Aviation Systems Ltd 110.8 1.8% CIT Aerospace 95.4 1.6% AerCap 90.1 1.5% MC Aviation Partners/Mitsubishi Corporation 88.3 1.5% Aviation Capital Group 52.0 0.9% Aircastle Advisor LLC 41.0 0.7%
Almost 60% of the 777s representing 20% of the total value of the portfolio is financed with US Exim guarantees. GECAS's managed exposure comprises over 50% of Air Canada's A320 family and over 40% of the 767-300ERs; and through its lending subsidiary PK AirFinance, GECAS has been arranged and/or provided financing for all of Air Canada's E175 and 40% of its 190s. BOC Aviation's exposure is entirely in 777s, representing almost 19% of the fleet. ILFC manages a relatively modest share of any aircraft type, peaking at 15% of the airline’s A320s. And BBAM's exposure from two 777-200s it manages for a German KG fund launched early last year represents over a third of that type.
Comment from Les Weal, Head of Valuations, Ascend
“Should Air Canada succumb to reorganisation, or the very least a realignment of capacity, there is no denying that the airline could be well positioned to obtain significant concessions from lessors and financiers. The market for the likes of the A320 and 767-300ER are under pressure, with most prospective customers for these types being in the enviable position of multiple offerings from the leasing community.
Of course some with bitter memories of the last restructuring may just have run out of patience, the concessions from the previous bankruptcy have elapsed and rates had, for a short time, been in keeping with the market, before the begging bowl was brought out again.”
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