CORRECTED-UPDATE 2-Air Canada's profit tops estimates as fuel costs fall

Fri Jul 29, 2016 8:37am EDT
 
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(Corrects paragraph 8 to say operating revenue estimate was "C$3.52 billion", not "$3.52 billion")

July 29 (Reuters) - Air Canada, the country's largest airline, reported a better-than-expected quarterly profit as it paid less for fuel, and cut its cost estimate for the year.

Air Canada said it now expected full-year adjusted cost per available seat mile (CASM), which excludes fuel costs, to fall in the range of 2.75-3.75 percent as it sees lower expenses for its Canadian operations.

The airline had previously estimated a decline of 1.75-2.75 percent.

Air Canada posted adjusted earned of 72 Canadian cents per share, well above analysts' average estimate of 58 Canadian cents, according to Thomson Reuters I/B/E/S.

The Montreal-based company's fuel costs per litre, typically an airline's largest variable cost, fell 22 percent to 52 Canadian cents in the second quarter.

However, net earnings fell to C$186 million ($141.32 million), or 66 Canadian cents per share, from C$296 million, or C$1.00 per share, a year earlier.

Air Canada's operating expenses rose 3 percent to C$3.18 billion, partly due to weak Canadian dollar.

Operating revenue rose 1.3 percent to C$3.46 billion, but was below analysts' estimate of C$3.52 billion. ($1 = C$1.32) (Reporting by Anet Josline Pinto in Bengaluru; Editing by Anil D'Silva)