MONTREAL - Air Canada has reported a first-quarter net loss of $288 million compared with a loss of $34 million in the first three months of last year. The latest loss included a $125-million provision for cargo price-fixing investigations and $89 million in currency-related setbacks.
The airline said Thursday its operating loss in the seasonally slow January-March quarter was $12 million, improving on a year-ago operating loss of $78 million.
Air Canada noted that because it no longer includes the Jazz regional operations in its consolidated accounting, the latest results are not directly comparable with a year ago.
Passenger revenue increased eight per cent to $2.3 billion, and Air Canada's cost per seat was unchanged from a year ago despite a $130-million increase in fuel expenses.
The suppression of other spending was attributed to the stronger Canadian dollar, economical new airliners, "and various cost reduction programs.''
"Our revenue model delivered solid unit revenue growth, and contributed to a 4.8 per cent improvement in our unit costs in the quarter, excluding fuel,'' stated Air Canada CEO Montie Brewer.
"During the quarter, we successfully introduced a number of fare increases which the market has absorbed,'' he added.
"Advance bookings remain strong, reflecting the growing Canadian economy and strong currency. However, the increase in fuel prices over the past several months has been unprecedented and the acceleration of these increases combined with price volatility presents an increasingly difficult challenge.''
The cargo-investigation provision arises from probes by competition authorities in the United States, Canada and Europe into alleged anti-competitive pricing by a number of airlines and cargo carriers. Air Canada has also been named in U.S. and Canadian class action lawsuits. The $125-million provision "does not address the proceedings in all jurisdictions, but only where there is sufficient information to do so,'' the airline said.
On a per-share basis, the quarterly net loss was 62 cents, compared with 57 cents a year ago.
