Air Canada's operating loss widens in Q1 2013

Washington DC
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Air Canada has recorded a operating loss of Canadian dollar (C$) 106 million ($105 million) in the first quarter, consistent with preliminary earnings released on 22 April.

This has widened from the C$91 million loss the Montreal-based carrier saw in the same three months of 2012.

As expected, the carrier also reported a net loss of C$260 million in the first quarter, narrowing from a net loss of C$274 million in the first quarter of 2012. When adjusted for special items, this loss totals $143 million compared to C$162 million in the same three months of last year.

Operating revenues totalled C$2.95 billion, down C$9 million year-over-year.

Weather delays during the quarter cost Air Canada about C$10 million. The carrier also incurred a C$24 million non-cash impairment charge related to Airbus A340-300 aircraft that it does not operate itself.

Cash and short-term investments were C$2.1 billion. Adjusted net debt decreased C$246 million from the first quarter of 2012 to $3.99 billion.

Passenger revenues in the first quarter were C$2.52 billion, increasing C$3 million. Passenger revenue per available seat mile increased 1.1% from the first quarter of 2012, while yields decline 1.1% year on year.

Load factors improved by 1.8 percentage points to 81% on a 1.1% growth in traffic.

Air Canada's total cost per available seat mile (CASM) increased 1.3% year-on-year to 18.9 cents, while adjusted CASM that excludes fuel and special items increased 1.4% to 12.5 cents.

"While the first quarter's loss was narrowed compared to the previous year, the quarter fell short of our expectations, in part due to a decline in premium travel demand," says Air Canada's president and chief executive Calin Rovinescu in a statement. "We are encouraged to see an improvement in second quarter economy and premium class cabin booking trends which are running above last year's levels, although the yield environment remains challenging."