Air Canada 2Q net loss doubles; carrier seeks stability after labor turmoil
Published: August 8, 2012
Air Canada (AC) reported a second-quarter net loss of C$ 96 million ($ 96 million), more than doubling a C$ 46 million net deficit in the prior-year period, as labor difficulties again hurt the Montreal-based carrier’s bottom line.
But president and CEO Calin Rovinescu noted that new labor contracts recently agreed to via arbitration will allow AC to focus on returning to operating profitably ( ATW Daily News, July 31 ).
“Air Canada’s operations were adversely impacted by labor disruptions in March and April of 2012, which resulted in a decline in bookings for travel originating in Canada in the immediate aftermath,” he said. “We were encouraged to see booking trends return to normal levels by the end of the second quarter … New collective agreements have now been finalized … [bringing] finality to what has been a challenging collective bargaining process with our large Canadian-based unions.”
He added that the company will now intensely focus on “leveraging our international network, cost transformation, engaging our customers and culture change.”
AC’s second-quarter revenue rose 2.4% to C$ 2.99 billion and operating profit was C$ 63 million, down 13.7%. Traffic grew 1.4% to 13.87 billion RPMs on a 0.6% increase in capacity to 16.61 billion ASMs, producing a load factor of 83.5%, up 0.7 point. Yield lifted 1.2% year-over-year to C$ 0.19.
AC said full-year 2012 capacity will increase just 0.5% to 1.5% over 2011.