Air Canada’s Earnings Exceed Estimates as Fuel Prices Declineby
Air Canada reported second-quarter profit that beat analysts’ estimates as revenue increased and the country’s biggest carrier benefited from lower fuel prices.
Adjusted earnings amounted to 72 Canadian cents, topping the 60-cent average of estimates compiled by Bloomberg. Revenue rose 1.3 percent to C$3.46 billion (US$2.63 billion), missing the C$3.53 billion that analysts expected.
Chief Executive Officer Calin Rovinescu’s five-year plan to reduce costs is being helped by a decline of about 20 percent in jet-fuel prices over the past year. He is adding flights to the U.S. and overseas, expanding the Rouge leisure unit and adding Boeing Co. 787 jets, which burn less fuel than the older aircraft they are replacing. Fuel is one of the biggest expenses for airlines, accounting for about one-third of costs.
Air Canada rose 1.8 percent to C$9.44 on Thursday in Toronto. That put the stock down 7.5 percent this year, trailing the 12 percent advance by Canada’s benchmark Standard & Poor’s/TSX Composite Index.