Air Canada profit beats estimates as passengers increase
By Allison Lampert
MONTREAL (Reuters) - Air Canada (AC.TO: Quote) reported a higher-than-expected quarterly profit on Monday as it flew more passengers, and the airline forecast lower costs for this quarter, sending its stock up nearly 7 percent.
Canada's largest airline said it expected cost per available seat mile, excluding fuel expenses and unusual items, to decline 5 percent to 6 percent in the fourth quarter and by 2.75 percent to 3.75 percent this year.
Chief Financial Officer Michael Rousseau said he expected free cash flow to be more positive next year than this year but would provide more specifics in early 2017.
Rousseau also told analysts the carrier would take delivery of nine B787 Dreamliner aircraft in 2017. Of those, five will be debt-financed, and four are expected to be leased.
The arrival of the B787s will allow Air Canada to displace five B767s from the carrier's mainline fleet to its low-cost Rouge line.
Chief Executive Officer Calin Rovinescu said the company was studying the impact of the possible privatization of Canada's airports, which are now operated by non-profit bodies under long-term leases with the federal government.
He said Air Canada would have an official position in the coming weeks but stressed that it would only support privatization if the country's already comparatively high aviation costs, including fees and surcharges, did not rise further.
"We know that aviation has continued to be a cash cow (for Canada) for many years," he said. Continued...