Air Canada results hurt by fuel costs, Aveos
By Susan Taylor
TORONTO (Reuters) - Air Canada's ACb.TO loss ballooned in the first quarter as the country's largest carrier grappled with wildcat strikes, rising fuel costs and charges from the shutdown of its aircraft maintenance contractor.
Air Canada's shares, which have dropped about 60 percent over the past year, edged higher on Friday after the company posted the results. Air Canada, last profitable four years ago, had provided estimates for some of the quarterly metrics last week.
Despite its recent performance, Montreal-based Air Canada sounded an optimistic note, saying it expected a sharp reduction in maintenance costs and efficiency gains from upcoming labor negotiations with its two biggest unions.
Still, with the airline still facing a swelling pension deficit, fractious labor relations and tougher competition, it conceded that a return to profit won't happen overnight.
"What you're seeing is the chipping away, through a transformational process, of many, many, many, many inefficiencies that are built-in and inherent in a legacy environment like this," said Chief Executive Calin Rovinescu during a conference call.
"Achieving it, through what you have seen in the last quarter, is not done without many, many bumps in the road."
Air Canada's first-quarter net loss widened to C$210 million, or 76 Canadian cents a share, from C$19 million, or 7 Canadian cents, a year earlier. Continued...