Hi there,
Exchange Income is better positioned than most airlines. It operates in a niche, in that it provides critical access to remote northern communities only accessed by air. In a recent report by the company it indicated that it has no parked aircraft and continues to fly into these communities. Although reduced passenger demand is expected, it also provides essential services such as food, health and commerce support.
It also expects to see no impact to its maritime surveillance ops. In fact, it is currently flying at, or above contracted levels.
The Regional One is the most impacted segment. The leasing portfolio and demand for parts and accessories will be materially impacted during this time.
All this being said, the company is in a strong position. It has $800 million in available capital. This is more than enough to cover the dividend and maintain operations. In fact, the company even commented that it has sufficient capital to pursue growth opportunities.
Further to this, on April 17th, the company announced its monthly dividend inline with previous. If they were in dire straights, I would have expected them to cut. That is not to say they may not cut in the future. The longer this drags on, the worse it is for everyone - EIF included. They are however, much better positioned than most commercial airlines.
It remains on our Dividend Bull List as we are confident in the long-term prospects of the company.
Mat