Air Canada Loss Wider Than Expected

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Published: August 9, 2012

Air Canada’s quarterly loss widened much more than expected as union disruptions and the closure of its plane maintenance contractor crimped operations at the country’s largest airline.

Operating expenses rose 3 percent in the second quarter, mainly on increases in wages, salaries and benefits, aircraft maintenance and capacity purchase costs.

Its net loss widened to CAD$ 96 million, from CAD$ 46 million a year earlier.

Air Canada recently sealed agreements with all its big unions after more than a year of fractious relations.

Aveos Fleet Performance, once the airline’s maintenance division, halted operations in March and laid off roughly 2,600 workers, most of whom were employed at maintenance facilities in Montreal, Winnipeg and Vancouver.

BY THE NUMBERS

Air Canada’s operating income in the quarter fell to CAD$ 63 million (USD$ 63.2 million) from CAD$ 73 million a year earlier.

Operating revenue rose 2 percent to CAD$ 2.99 billion.

Passenger revenue per available seat mile (RASM) rose 2 percent. By comparison, WestJet’s RASM rose 6 percent in the quarter.

Costs per available seat mile, or CASM, increased little more than 2 percent in the quarter. Excluding fuel expense and the cost of ground packages at Air Canada Vacations, CASM rose 3.6 percent.

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