Case / Assignment #2 Business & Marketing Coursework

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Managerial Accounting
The spread of covid-19 continues having a huge impact on Canadian business and has also affected different sectors and industries. Since the outbreak of covid-19, almost all companies have been impacted since companies and organizations have been incapacitated in conducting businesses both locally and internationally. It is crucial comprehending that the disruptions caused by covid-19 have caused significant damages since most Canadian companies have recorded significant losses which would hinder and affect future growth and companies that have been highly affected may have challenges attracting investors. The financial reports available to members of the public indicates that in the first and send a quarter of 2020, Canadian-based companies have made losses worth millions of dollars as compared to previous years. This literature examines and analyzes Air Canada’s financial statements to evaluate the impact of covid-19 and determine how it can affect investors’ decisions.
Air Canada is the leading airline in the country and it operates in hundreds of destinations across Canada and others in other countries. Ideally, the spread of covid-19 has had a huge impact on the airline companies, this is after different countries closed their borders in an attempt to control and manage the spread of the virus. Different provinces I Canada have implemented their covid-19 restrictions for individuals flying into Canada. Additionally, Canada has also banned the entry of non-residents foreign nationals as a key strategy for curbing the spread of coronavirus disease (Universal, p.1). Besides, domestic travel has also been impacted as a result of restrictions implemented by public health agencies. These restrictions had a significant impact on Air Canada since the company had to reduce and stop both internal and external operations.
Ideally, the available financial statements show how Air Canada has been impacted by the spread of covid-19. In 2019, the company’s passenger revenues were at 17.232 billion which was a 6.6 per cent increase from 2018. The increase in passenger revenues was attributed to yield improvement as well as traffic growth of 1.9 percent. Additionally, the operating expenses had increased by $974 million from 2018 to about $17.481 billion in 2019 (Air Canada). Also, Air Canada’s cost per available seat mile had increased to $1.4 percent from 2018. Additionally, in the fourth quarter of 2019, Air Canada reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of approximately $665 million which was an increase from $619 million in 2018.
Besides, at December 31, 2019, the company’s unrestricted liquidity was estimated at $7.380 bi...