Company Watch - Air Canada

AirGuide Business, Feb 11, 2008

Feb 11, 2008

Air Canada Owner Approached On US Mergers. ACE Aviation Holdings is looking at several ways to wring the most value from its Air Canada stake, including sales to private equity players and even a linkup with a US airline, ACE's chief executive said on Friday Feb. 8. ACE CEO Robert Milton said he still prefers the original plan of distributing the 75 percent interest in Canada's dominant carrier to shareholders before winding up the holding company structure, rather than buying back the minority. But weakness in Air Canada's stock price has prompted ACE to keep all its options on the table, he said after the shrinking holding company reported a fourth quarter net income of CAD$1.13 billion (USD$1.13 billion). Milton said that he has been approached by private equity players and pension funds on ways that Air Canada could join the US airline consolidation. Feb 10, 2008

Air Canada operating income may be hurt by an expected increase in depreciation of between CAD$120 million and CAD$140 million, compared with 2007, due to investments in new aircraft and the refurbishment of older ones. Feb 7, 2008

Air Canada quarterly operating costs fell by 3.9 percent per available seat mile to 12.4 cents, excluding fuel, Air Canada said. With fuel included, costs slipped by 2 percent as the newer planes helped weather oil prices that jumped to near USD$100 a barrel. Feb 7, 2008

Air Canada Swings To Q4 Profit, Sees Bright 2008. Air Canada flew into the black in the fourth quarter as it added passengers in a healthy domestic market and cut non-fuel costs, the country's dominant airline said on Thursday. Air Canada executives said they expect revenues to remain positive at home and even in the United States, where the economy has been drifting into a downturn and airlines are moving toward mergers. The airline logged a record Canadian load factor in January and forward bookings point to more of the same, Air Canada said. Transatlantic routes are still weak, but US business remains strong, it said. Feb 7, 2008

Air Canada, in the fourth quarter, earned CAD$35 million (USD$35 million), up from a year-earlier net loss of CAD$144 million. The most recent quarter included foreign currency gains of CAD$20 million. Operating income for the quarter was CAD$72 million, compared with a loss of CAD$5 million. Revenue rose 4 percent to CAD$2.5 billion. The airline said it expects its capacity to increase this year by between 2.5 percent and 4 percent, for both the Canadian market and on a system-wide basis. Feb 7, 2008

Air Canada's outlook and unexpectedly profitable fourth quarter -- both helped by the replacement of older jets with new, more fuel-efficient Boeing 777s -- prompted a jump in Air Canada shares. Air Canada A-series shares gained CAD$1.47, or nearly 18 percent, to CAD$9.66 on the Toronto Stock Exchange. Feb 7, 2008

Air Canada's shares had fallen 57 percent in the past year as analysts forecast a weakening market and investors worried about the prospect of more shares coming on the market when parent ACE Aviation Holdings parts with its remaining stake. Feb 7, 2008

Air Canada fired another shot, unveiling a New York flight pass that effectively matches Porter Airlines's lowest one-way fare. For instance, an Air Canada flight pass with four "credits" consists of four one-way trips that cost a total of $576.45, including GST. Air Canada noted that it offers flights from Toronto, Ottawa and Montreal to Newark and New York's LaGuardia Airport. By contrast, Porter passengers in Ottawa and Montreal would have to fly to Toronto City Centre Airport to get to Newark. Feb 6, 2008

Industry observers say that fares will fluctuate frequently on the Toronto-Newark route. After the brief seat sale at $95, Air Canada has subsequently raised its base Toronto-Newark, one-way price to $120 - still cheaper than the $194 charged last Thursday. Privately owned Porter Airlines, which launched in October, 2006, currently has five domestic cities on its route map. Feb 6, 2008

Editorial eMail: edit@AirGuideOnline.com

For Air Transport & Travel Business Experts contact our Director of Content Aram Gesar eMail: bizintel@AirGuideOnline.com

To Advertise: advert@AirGuideOnline.com

Copyright 1/2 2008 Pyramid Media Group, Inc. All rights reserved. AirGuideOnline.com and AirGuideBusiness.com