April 29, 2016 / 10:52 AM / 3 years ago

Air Canada looking to firm up Bombardier CSeries order 'soon'

(Reuters) - Air Canada (AC.TO), the country’s largest airline, said on Friday it was looking to finalize an order to buy 45 Bombardier Inc (BBDb.TO) CSeries jets “soon”, looking at firming up an order that was first announced in February.

An Air Canada aircraft lands at the Calgary International Airport in Calgary, Alberta, June 17, 2008. REUTERS/Todd Korol

Air Canada also reported a first-quarter profit, compared with a year-earlier loss, due to lower fuel costs, helping send the company’s shares up 13 percent to C$9.37 in morning trading.

The carrier’s order in February to buy the 45 planes, with an option to buy an additional 30, was valued at as much as $3.8 billion at the time, based on the list price of the aircraft.

“Subject to final documentation and satisfaction of conditions, we look forward to firming up the order soon,” Chief Executive Calin Rovinescu said in an analyst call on Friday.

The order was the first in 16 months for the Bombardier CSeries aircraft, which has been plagued by delays and cost overruns. Delta Air Lines Inc (DAL.N) on Thursday ordered 125 CSeries jets.


Air Canada said on Friday it expects the strengthening Canadian dollar to lower costs for the year. A stronger Canadian dollar helps Canadian airlines as they purchase planes and fuel in U.S. dollars.

The carrier forecast earnings before interest, taxes, depreciation, amortization and aircraft rent to increase 4-8 percent in 2016 from a year earlier.

Air Canada said it expects 2016 adjusted cost per available seat mile, which excludes fuel costs, to fall between 1.75 percent and 2.75 percent.

It had in February expected these costs would range between a decline of 0.5 percent and an increase of 0.5 percent.

Air Canada’s operating expense per available seat mile dropped about 3.3 percent in the first quarter, as lower fuel costs more than offset the impact of a weaker national currency.

The company reported a net profit of C$101 million ($81 million), or 35 Canadian cents per share, for the quarter, compared with a loss of C$309 million, or C$1.08 per share, a year earlier.

Operating revenue rose 2.9 percent to C$3.34 billion.

Reporting by Amrutha Gayathri in Bengaluru; Editing by Maju Samuel and Savio D'Souza

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