Category Archives: Air Canada

Air Canada adding more planes to Rouge for use on domestic routes

 

MONTREAL — Air Canada is looking to cut operating costs and defend against competition from upstart low-cost competitors by adding more planes to its Rouge fleet and flying them on regional routes within Canada.
Narrow-body Rouge planes that operate at lower cost could replace smaller regional aircraft operated by airline partners like Jazz on some routes.   For example, one of several flights per day on a popular route could be converted to an Airbus plane, industry analysts were told Friday.   Rouge aircraft are also available to compete if necessary with ultra low-cost carriers like WestJet’s new Swoop subsidiary, Flair Airlines or Canada Jetlines.
“We needed to have the capability of introducing a lower-cost competitive vehicle, both on offence and on defence,” Air Canada CEO Calin Rovinescu said during a conference call about its 2017 results.   The increased use of Rouge planes domestically is permitted under changes to the collective agreement with pilots negotiated last year.
Several more Rouge planes are being added this summer and once all Boeing 787s are delivered next year there will be no limit on the number or type of single-aisle planes that can be flown by Rouge.   Ben Smith, president of passenger airlines at Air Canada, said Rouge Airbus A320s and 321s can be converted to high density single class cabins or possibly another airplane type such as the Boeing 737 Max.
Rovinescu also told analysts that a joint venture with Air China expected to be concluded in the coming months would enable it to be more aggressive in the competitive Pacific market.   The joint venture would expand the relationship beyond the use of lounges and codesharing as it faces pressures on flights to China and Hong Kong.
“It certainly it should certainly be an assistance to us in competing more aggressively,” Rovinescu said.
Meanwhile, Air Canada announced Friday a new $250-million cost-cutting plan to be implemented by the end of 2019.    That follows the completion of a $500-million plan launched in 2009 that eventually netted about $575 million in savings.   The new drive to cut costs comes as the Montreal-based airline looks to maintain margins despite the expected slowing down of its capacity growth with the arrival of its final new large planes.   “We showed we can take costs out in bad times but we now need to show we can continue to have that cost discipline in good times,” Rovinescu told analysts.
The cost savings are expected to come from procurement, maintenance, aircraft leases, internal engineering, overhead and simplified business processes, added chief financial officer Michael Rousseau.   Chris Murray of AltaCorp Capital Inc. said the new drive for efficiency is important as Air Canada’s growth slows to about seven per cent in 2018 from nearly 12 per cent in 2017, with more reductions likely in subsequent years.  He expects the savings to come from “behind the scenes stuff” that won’t be felt by passengers.
Air Canada capped a strong 2017 by earning adjusted net income of $61 million, or 22 cents per share for the quarter — ahead of analyst estimates of 14 cents per share, according to Thomson Reuters data.    The airline’s operating revenue was $3.82 billion in the fourth quarter, up from $3.43 billion a year earlier and above the estimate of $3.75 billion.    Net income was $8 million or two cents per share for the three months ended Dec. 31, which was an improvement over a 2016 fourth-quarter loss of $179 million but lower than expected.   “Overall, we liked what we saw in the Q4 results,” wrote analyst Walter Spracklin of RBC Dominion Securities in a note to clients.
For the full year, it earned $2.04 billion or $7.34 per share, up from $876 million or $3.10 per share in 2016. Adjusted profits also rose five cents per share to $4.11.   Revenue grew 10.7 per cent to $16.2 billion as the airline carried a record 48.1 million passengers, up 7.3 per cent from the prior year.   This included record revenues from cargo and Air Canada Vacations along with more than $1 billion in ancillary revenues from payments for checked baggage, seats, food and changed bookings.
Strong demand and growing connecting traffic through its three hubs in Canada are expected to result in another good year in 2018, said Rovinescu, who added the performance is under appreciated by investors.   Air Canada’s shares grew nearly 90 per cent last year and were up 2.3 per cent at $24.88 in midday trading on the Toronto Stock Exchange.

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Air Canada Reports 2017 Annual Results

 

  • Operating income of $1.364 billion and record EBITDAR of $2.921 billion
  • Record operating revenues of $16.252 billion
  • Leverage ratio of 2.1 and unrestricted liquidity of $4.181 billion

MONTRÉAL, Feb. 16, 2018 /CNW Telbec/ – Air Canada today reported record full year 2017 EBITDAR(1) (earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent) of $2.921 billion compared to the previous record full year 2016 EBITDAR of $2.768 billion, an increase of $153 million.    Air Canada reported 2017 operating income of $1.364 billion compared to 2016 operating income of $1.345 billion.    Adjusted pre-tax income(1) amounted to $1.158 billion in 2017 compared to adjusted pre-tax income of $1.148 billion in 2016.    On a GAAP basis, the airline reported record income before income taxes of $1.279 billion in 2017 compared to income before income taxes of $877 million in 2016.
Special items are excluded from Air Canada’s reported EBITDAR calculations.   See below for a description of the special items recorded in 2017 and 2016.
“Our strong 2017 results underscore the effectiveness of our transformation strategy, as well as the success of our global expansion and the power of our comprehensive network.    We profitably expanded our global network with 30 new routes launched, and carried a record 48 million customers, while maintaining our focus on cost discipline and continuing to improve margins.    Our achievements were driven by the hard work and commitment of our 30,000 employees and I commend them for enthusiastically embracing positive change at Air Canada.    I especially want to thank our colleagues from our various Operations branches who worked through extremely challenging and disruptive winter conditions over the holiday period, for their commitment and professionalism in bringing our customers safely to their destinations,” said Calin Rovinescu, President and Chief Executive Officer.
“The extent of our transformation is evident in our continuing records for financial results.    In 2017, we achieved our fifth consecutive year of record EBITDAR, passenger revenue climbed 10 per cent to a record $14.5 billion, and our unrestricted liquidity amounted to $4.2 billion at year-end.  Our transformation has made Air Canada profitable while reducing risk in many areas, such as level of indebtedness and pension obligations, the twin pillars of long-term sustainability.
“We remain committed to meeting the key financial targets set during our September 2017 Investor Day.    Beyond this, as we continue to capitalize on the momentum of our strategy and to further entrench cost discipline into our DNA, we have undertaken a new Cost Transformation Program intended to secure an additional $250 million in savings by the end of 2019,” said Mr. Rovinescu.
“In 2018, our wide-body fleet renewal will be substantially completed as our mainline narrow-body replacement program accelerates.    Along with new aircraft, we will keep investing in products and services, including our new loyalty program, technology to enrich the travel experience, and enhanced airport services and amenities.    In 2017, we were recognized as “Best Airline in North America” by Skytrax and we intend to continue providing a superior product to our customers, whom I thank on behalf of all Air Canada employees for choosing to fly with us,” concluded Mr. Rovinescu.

Full Year Income Statement Highlights

In 2017, on capacity growth of 11.6 per cent, record system passenger revenues of $14.471 billion increased $1.323 billionor 10.1 per cent from 2016.    The increase in system passenger revenues was driven by traffic growth of 11.3 per cent partly offset by a yield decline of 1.0 per cent.    An increase in average stage length of 4.8 per cent had the effect of reducing system yield by 2.7 percentage points.    On a stage-length adjusted basis, system yield increased 1.7 per cent year-over-year.
In the business cabin, system passenger revenues increased $334 million or 13.4 per cent from 2016 on traffic and yield growth of 9.8 per cent and 3.3 per cent, respectively.
In 2017, operating expenses of $14.888 billion increased $1.556 billion or 12 per cent from 2016, mainly driven by the increase in capacity and higher fuel prices year-over-year.
Air Canada’s cost per available seat mile (CASM) increased 0.1 per cent from 2016.    The airline’s adjusted CASM(1)decreased 3.0 per cent from 2016, in line with the 3.0 to 4.0 per cent decrease projected in Air Canada’s October 25, 2017 news release.
Air Canada recorded adjusted net income(1) of $1.142 billion or $4.11 per diluted share in 2017 compared to adjusted net income of $1.147 billion or $4.06 per diluted share in 2016.    Starting as of and including the fourth quarter of 2017, adjusted net income is determined net of tax and includes the income tax effect of adjustments included in the measurement of adjusted net income.   Prior to the fourth quarter of 2017, there was no deferred income tax expense recorded because of significant unrecognized deferred tax assets.    A tax expense of $16 million affected fourth quarter and full year 2017 adjusted net income results.    On a GAAP basis, the airline reported 2017 net income of $2.038 billion or $7.34 per diluted share compared to 2016 net income of $876 million or $3.10 per diluted share.

Air Canada Announces Appointment of Jon Turner as Vice President, Maintenance

Air Canada Announces Appointment of Jon Turner as Vice President, Maintenance (CNW Group/Air Canada)

 

MONTREALFeb. 15, 2018 /CNW Telbec/ – Air Canada President and Chief Executive Officer Calin Rovinescu today announced the appointment of Jon Turner as Vice President, Maintenance.
Mr. Turner began his career at Air Canada in 1980 and held a wide-range of critical operational positions with the company.    From 1997 to 2004, as General Manager, Aircraft Programs, he was responsible for all aspects of Air Canada’s aircraft acquisition and disposal.    From 2004 to 2007 he was Vice President, Maintenance and Engineering. He is returning to Air Canada after working at other airlines, most recently Air Canada Express partner, Sky Regional, where he was President and Chief Executive Officer.    He will report to Richard Steer, Senior Vice-President – Operations, who reports to Benjamin Smith, President, Passenger Airlines at Air Canada, who has overall responsibility for all aspects of the operations of the airline.
“Jon is an excellent addition to our team because he brings wide industry experience and a deep knowledge of Air Canada.    He rejoins Air Canada at an exciting time as we complete the renewal of our wide-body fleet and begin taking delivery of new Boeing 737 Max aircraft under our narrow-body fleet renewal program.    His leadership capabilities will ensure the smooth integration of this new fleet type while upholding Air Canada’s high maintenance standards,” said Mr. Steer.
In his role, Mr. Turner will assume responsibility for managing and providing strategic direction for Air Canada’s maintenance programs, core engineering, fleet management, control of technical safety and airworthiness standards, maintenance operations control, supply chain, as well as line maintenance.

Air Canada adds new Western Canada routes from July 2018

 

Air Canada in summer 2018 season is introducing new regional routes in Western Canada, effective from 02JUL18. Announced by the airline on 30JAN18, planned new routes include the following.

Calgary – Comox 1 daily Dash8-Q400 (seasonal service)
AC8362 YYC1005 – 1058YQQ DH4 D
AC8361 YQQ1130 – 1414YYC DH4 D

Edmonton – Kelowna 2 daily Dash8-Q400
AC8395 YEG0840 – 0859YLW DH4 D
AC8403 YEG1605 – 1624YLW DH4 D

AC8394 YLW0930 – 1151YEG DH4 D
AC8404 YLW1655 – 1916YEG DH4 D

Edmonton – Victoria 2 daily Dash8-Q400 (seasonal service)
AC8095 YEG0840 – 0940YYJ DH4 D
AC8053 YEG1600 – 1700YYJ DH4 D

AC8086 YYJ1010 – 1255YEG DH4 D
AC8088 YYJ1730 – 2015YEG DH4 D

Air Canada extends Vancouver-Delhi route to year round as June

 

Air Canada from June 2018 is converting seasonal Vancouver – Delhi to year-round operation, announced by the airline yesterday.   From 08JUN18, Boeing 787-9 will operate this route 4 times a week, during summer season.

AC044 YVR0130 – 0400+1DEL 789 x146
AC045 DEL0610 – 0730YVR 789 x257