Bill Carrigan Air Canada (A) AC.A-T HOLD Oct 10, 2007

9.25% Senior Secured Notes maturing Jan 8/15. This has a tremendous amount of asset coverage. Have roughly $1 billion in debt at this level and there is more than $2 billion that is covering it. Fundamentals for Air Canada continue to improve, almost on a daily basis.

[Did not specify the .A or .B shares] Airline industry collectively has never turned a profit. Bad place to invest. But you can trade it.

The only word for airline stocks is ‘Youza’. It has been almost parabolic. They have had a couple of regular periods of consolidation. Don’t buy now, but wait for a consolidation.

There could be quite a bit of upside. They were managed quite stupidly for a number of years. But now there is a danger from the discount airlines. The debt load is still heavy. He could see it for a good momentum play.

Spent the brutal years tidying itself up and the airlines are on an upturn. The company seems to be on a role. It is probably still going up from here, but he would not buy it now.

This stock actually has upside. It is probably undervalued about 20%. They are expanding their capacity about 9%, upgrading some aircraft. United Airlines trades at 50% of revenues. Air Canada is at 20%. If they can pay down their debt then the stock has upside.