Air Canada operating profit rises as costs fall
(Reuters) - Air Canada (ACb.TO: Quote) reported a 56 percent rise in third-quarter operating profit from a year earlier, marking a turnaround from the second quarter when bookings slumped in the wake of wildcat strikes and the collapse of its maintenance contractor.
Air Canada and WestJet Airlines Ltd (WJA.TO: Quote), its main rival, have been able to hike fares this year without scaring away passengers as both have kept a tight lid on capacity increases, even during the busy flying months over the summer.
Air Canada said it planned to increase its system capacity by 1.5-3.0 percent for 2013. For the current year, it expects system capacity growth of 0.75-1.25 percent.
Operating income in the quarter increased to C$421 million from C$270 million a year earlier.
The airline reported net income of C$429 million, or C$1.54 per share, compared with a net loss of C$124 million, or 45 Canadian cents per share, a year earlier, mainly due to foreign exchange gains.
On an adjusted basis, it earned 82 Canadian cents per share. Operating revenue rose 3 percent to C$3.33 billion.
Operating expenses fell 2 percent.
Air Canada plans to launch a low-cost carrier as a way to cut its high costs and boost revenue and market share after years of stagnation.
Passenger revenue per available seat mile, an industry performance benchmark, rose 2.2 percent from the same quarter last year. Continued...