Air Canada has reported a bigger quarterly loss as the airline cut fares to fill seats in long-haul leisure markets.
Load factor, which measures how effectively the airline filled seats, fell to 79.9 per cent in the fourth quarter ended December 31 from 81.1 per cent a year earlier.
The carrier’s fuel cost per litre rose 1.4 per cent.
However, the country’s largest airline said its adjusted cost per available seat mile, excluding fuel costs and unusual items, fell 6.1 per cent.
The company’s net loss widened to C$179 million (Dh502.4m), or 66 Canadian cents per share, in the latest quarter from C$116m, or 41 Canadian cents per share, a year earlier.
The Montreal-based airline’s revenue rose 7.6 per cent to C$3.43 billion.
The carrier said rising fuel costs would cause a key profit measure to fall by half in the first quarter.
The forecast implies earnings before interest, taxes, depreciation and aircraft rent of C$250m in the first quarter, trailing the C$366m estimated by Fadi Chamoun, an analyst at BMO Capital Markets. A margin of 6.9 per cent, half of last year’s level, would fall well short of the 12 per cent predicted by Cowen & Co, which also expected lower non-fuel costs.
While results were “solid,” the company’s 2017 outlook “had elements that caused some trepidation and that was enough to bring the stock back down to week-ago levels”, Walter Spracklin, an analyst at RBC Capital Markets, said in a note to clients.
Air Canada aims to expand its Rouge discount carrier and add more fuel-efficient jets such as Boeing 787 Dreamliners and 737 Max aircraft. It has begun discussions with its pilots about expanding Rouge beyond 50 aircraft.
“There is definitely interest on both sides to look into that, but it’s way to soon to speculate if we’ll be able to come to an agreement,” said Ben Smith, who runs the company’s passenger airline unit.
* Agencies
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Spain drain
CONVICTED
Lionel Messi Found guilty in 2016 of of using companies in Belize, Britain, Switzerland and Uruguay to avoid paying €4.1m in taxes on income earned from image rights. Sentenced to 21 months in jail and fined more than €2m. But prison sentence has since been replaced by another fine of €252,000.
Javier Mascherano Accepted one-year suspended sentence in January 2016 for tax fraud after found guilty of failing to pay €1.5m in taxes for 2011 and 2012. Unlike Messi he avoided trial by admitting to tax evasion.
Angel di Maria Argentina and Paris Saint-Germain star Angel di Maria was fined and given a 16-month prison sentence for tax fraud during his time at Real Madrid. But he is unlikely to go to prison as is normal in Spain for first offences for non-violent crimes carrying sentence of less than two years.
SUSPECTED
Cristiano Ronaldo Real Madrid's star striker, accused of evading €14.7m in taxes, appears in court on Monday. Portuguese star faces four charges of fraud through offshore companies.
Jose Mourinho Manchester United manager accused of evading €3.3m in tax in 2011 and 2012, during time in charge at Real Madrid. But Gestifute, which represents him, says he has already settled matter with Spanish tax authorities.
Samuel Eto'o In November 2016, Spanish prosecutors sought jail sentence of 10 years and fines totalling €18m for Cameroonian, accused of failing to pay €3.9m in taxes during time at Barcelona from 2004 to 2009.
Radamel Falcao Colombian striker Falcao suspected of failing to correctly declare €7.4m of income earned from image rights between 2012 and 2013 while at Atletico Madrid. He has since paid €8.2m to Spanish tax authorities, a sum that includes interest on the original amount.
Jorge Mendes Portuguese super-agent put under official investigation last month by Spanish court investigating alleged tax evasion by Falcao, a client of his. He defended himself, telling closed-door hearing he "never" advised players in tax matters.
