Air Canada, Debt or Aircraft

http://www.bloomberg.com/news/2010-09-27/air-canada-forgoes-buying-planes-to-cut-debt-as-bonds-gain-canada-credit.html

The commercial airline industry has gone through many ups and downs over the past decade, with September 11^th and the high oil prices being the major points of heartache for the industry.  This decade has seen many of the worlds top airlines go into bankruptcy protection, Air Canada was one of them.   The choice of Air Canada to forgo the replacement of some aircraft in order to pay off close to $1 billion in debt is a very smart decision in these economically turbulent times.  Many airlines that are laden in debt are having to cease operations because they cannot pay creditors, so cutting down on debt should be placed ahead of new aircraft.  Sometimes fleet replacement should be prioritized but Air Canada need not worry since it has 18 new Boeing 777, while the rest of the fleet has had a facelift to the brand new interiors.  The current market for airlines is more favourable to the airlines that aren’t crippled by debt, not those who are expanding at non-sustainable rate, for that reason the decision makers at Air Canada made the right decision to pay off debt instead of replacing some aircraft.