Air Canada plans bond redemptions, refinancing to cut debt load

Air Canada plans to ease its debt load and push back maturities to cut costs as the airline industry wrestles with overcapacity and weak fares. The airline intends to redeem $700m of US dollar first- and second-lien bonds maturing in 2019 and 2020, as well as C$300m of Canadian dollar bonds maturing in 2019, Air Canada said Tuesday. The arrangement includes plans to refinance its existing senior secured credit facility as well as the notes, the Montreal-based company said. Air Canada is in the midst of a plan to trim its key cost ratio by about 21% by 2018. To get there, the carrier is cramming more passengers on long-haul aircraft, expanding the low-cost Rouge leisure unit and adding fuel-efficient jets such as Boeing Co.’s 787 Dreamliner. Airfares are under pressure as US airlines add capacity, with Air Canada’s yields on trans-Atlantic routes falling 9.6% in Q2, according to Bloomberg Intelligence data. <br/>