Air Canada prepays C$589 million of aircraft-related debt

By Wendy Van Sickle

Columbus, Ohio, Sept. 7 – Air Canada said it prepaid about C$589 million of debt used to purchase aircraft, according to a news release.

Specifically, Air Canada prepaid about C$462 million of loans from Export Development Corp. that were used by the company to help fund its acquisition of 14 Airbus A220-300 aircraft.

The prepayment, which was subject to accrued interest and break costs, was made on Aug. 30.

The airline additionally prepaid financings of about C$127 million supported by the Export-Import Bank of the United States previously used to help fund Air Canada’s acquisition of four Boeing 787-8 aircraft. The prepayment, which was subject to accrued interest, was made on Sept. 6.

“One of Air Canada's top priorities following the pandemic is to deleverage and since late last year we have now pre-paid approximately C$1.87 billion in debt. This strengthens our balance sheet and provides us more flexibility to make strategic investments, including to improve the customer experience, and to continue upgrading our fleet such as through our previously announced acquisition of Canadian-made Airbus A220 aircraft.

“With our very solid liquidity position and cash flow we will continue to look for more opportunities to reduce debt further,” John Di Bert, executive vice president and chief financial officer of Air Canada, said in the release.

The C$1.87 billion of prepayments includes the repurchase of some outstanding 4% convertible senior notes due 2025 completed last year.

Air Canada is a Montreal-based airline company.

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