TORONTO (Reuters) - Air Canada ACb.TO, the country’s largest carrier, is looking for ways to bolster revenue and cut costs to compensate for the weakening Canadian dollar, its chief executive officer said on Tuesday.
Air Canada had forecast the Canadian dollar would weaken and had been searching for ways blunt the impact, but the currency has fallen more than it had expected, CEO Calin Rovinescu said in a speech in Toronto.
“We got a head start looking at ways to mitigate the exposure such as additional cost reductions or revenue enhancements initiatives,” he said, but did not provide any specific details.
Rovinescu said the airline has a currency hedge position that will absorb some of its exposure. He also noted that the price of crude, which often moves in tandem with the Canadian dollar, has also fallen slightly.
Air Canada’s stock, which hit its strongest level since March 2008 last month, has tumbled about 25 percent in less than two weeks on concerns the weaker Canadian dollar will drive up its costs.
Shares of Air Canada, which reports its fourth quarter results on February 12, were down 1.6 percent at C$7.56 in Toronto on Tuesday.
WestJet Airlines Ltd (WJA.TO), which reported full year results on Tuesday, has raised ticket prices recently to compensate for rising expenses caused the weak currency. It said it could increase them again if the Canadian dollar falls further.
Editing by Peter Galloway