May 06, 2010

Air Canada reported a narrower first-quarter loss on Thursday, as revenues and passenger traffic increased, reflecting a strengthening economic recovery.

Just 10 months ago, Air Canada was teetering on the edge of bankruptcy protection, sideswiped by the recession and a heavy debt load, before it was saved by a last-minute financing and deals with its unions.

"Growth in revenue and traffic, combined with continued reductions in unit cost led to a narrowed operating loss," said chief executive Calin Rovinescu in a statement.

"We are encouraged to see some evidence of an economic recovery and that a gradual improvement in business travel demand can be expected over the coming year," he added.

The airline lost CAD$85 million (USD$82.60 million) for the first quarter, compared with a loss of CAD$400 million a year earlier.

Revenue rose 5.4 percent to CAD$2.52 billion.

OUTLOOK

Air Canada said it plans to increase its full-year 2010 system capacity, as measured by available seat miles (ASMs), by 4 to 6 percent from the full-year 2009 level.

In the second-quarter, the company plans to increase its system ASM capacity by 4.5 to 5.5 percent, over year-ago levels.

The company also said it expects full-year cost per available seat mile (CASM), excluding fuel expense, to fall 2 to 4 percent from year-ago levels. On this basis, costs in the second-quarter are expected to fall by 1.5 to 2.5 percent.

On an annualised basis, the airline plans to lower costs by CAD$270 million this year and CAD$500 million by the end of 2011.

(Reuters)

Source: http://news.airwise.com/story/view/1273148506.html