Air Canada shares take off
Airline sets record for Q2 revenue
MONTREAL Air Canada’s shares got a lift Wednesday after the airline had its best second-quarter revenue in its history and dramatically improved its operating income by successfully trimming costs.
On the Toronto Stock Exchange, Air Canada’s B shares soared 25 per cent in heavy trading Wednesday. The stock gained 53 cents, to close at $2.65, but remained short of the 52-week high of $3.40.
Air Canada’s adjusted profit of $115 million amounted to 41 cents per share, an improvement from a year-earlier adjusted net loss of $7 million, or two cents per share, the airline announced Wednesday in its quarterly report.
Analysts had estimated Air Canada would have 10 cents per share of adjusted net income and $3.02 billion of revenue, according to data compiled by Thomson Reuters.
Walter Spracklin of RBC Capital Markets said Air Canada’s strong performance was driven by “good cost controls and positive yield.
“Costs (are) coming down quicker than expected,” he wrote in a report, noting the airline is projecting lower costs for the year, likely driven by lower maintenance costs.
Air Canada’s operating income increased to $174 million, from $63 million, and operating revenue totalled $3.06 billion, a second-quarter record for Air Canada and up from $2.99 billion a year earlier. Passenger revenues increased three per cent, to $2.76 billion, on a 1.6 per cent growth in traffic and a 1.5 per cent improvement in yield.
Including one-time costs, the Montreal-based airline lost $23 million, or nine cents per share, for the three months ended June 30, compared with a loss of $161 million, or 59 cents per share, a year earlier.
“With key labour and pension funding issues behind us, the execution of our strategic priorities is now our No. 1 focus,” CEO Calin Rovinescu told analysts.