* Says stronger cargo volumes indicate some recovery
* Business travel not yet back
* Says seeing rebound in stock price
CALGARY, Alberta, March 26 (Reuters) - Air Canada ACa.TO ACb.TO Chief Executive Calin Rovinescu said on Friday he’s beginning to see signs of a recovery for the North American airline industry as cargo volumes rise.
Rovinescu, who heads Canada’s largest airline, said Air Canada is seeing stronger demand for cargo services, which, he said, is a key indicator that an economic recovery has begun.
“We’ve seen some encouraging news from the cargo environment,” Rovinescu told reporters. “We are seeing a marked improvement over last year and generally cargo tends to be the bellwether indicator that the recovery is starting.”
Air Canada was struggling financially when Rovinescu took over as the carrier’s chief executive last April. Indeed some reports speculated the airline might need to file for bankruptcy protection.
Since he took the helm, Rovinescu has strengthened Air Canada’s liquidity position, lined up equity funding, won support for deferring pension payments while cutting both capacity and costs.
While he’s not ready to declare a recovery, saying the airline industry still faced a weak market, he said conditions were much improved over the past 12 months. But business travel — which generates most of the airline’s profit — has yet to rebound.
“Businesses tend to need to recover first before ... airlines that cater to businesses start seeing the recovery,” he said.
Rovinescu also commented on the performance of his company’s shares. Air Canada’s class B shares fell 11 Canadian cents to C$2.10 on the Toronto Stock Exchange on Friday. However the stock is nearly triple its 52-week low of 73 Canadian cents and is up by two-thirds since the start of the year.
“We’ve probably had ... since the beginning of this year, the strongest share performance among the North American carrier,” he said. “We started from a much lower point. Last year the airline traded on ... some of the cash and liquidity risks. Now that those are largely behind and we’ve started to see a rebound in the stock price.”
$1=$1.03 Canadian Reporting by Scott Haggett; Editing by Frank McGurty