By Oliver Johnson | May 4, 2012 Estimated reading time 1 minute, 40 seconds.
Air Canada has revealed a loss of $210 million in the first quarter, blaming rising fuel costs, labour disputes, and the closure of the Aveos manufacturing plant.
The figure compares with a first-quarter loss of $19 million in 2011, but the amount the airline said it has had to spend on fuel alone has risen $147 million – a 20 per cent increase – over the previous year’s quarter.
It is also counting the cost of the closure of Aveos, writing off payments and commitments worth $120 million. But the ongoing union action surrounding the closure hasn’t been the only political issue troubling the airline. Air Canada CEO Calin Rovinescu said strikes by workers and pilots in the first quarter had caused flight cancellations that had a “damaging rippling effect” on consumer confidence, causing a decline in bookings for travel originating in Canada.
Rovinescu said, however, that media reports were disproportionate to the actual disruption the airline faced from the ongoing labour disputes.
The results did reveal some good news for the airline, though. It ended the quarter with $2.25 billion in cash and cash equivalents, which represented an increase of $135 million from the previous year. Adjusted net debt was reduced by more than $200 million and the net loss of 76 cents per share was actually less than analysts had expected, with Air Canada shares gaining two cents to 94 cents at midday on Friday.
