Canadian Immigration: Air Canada announced on Wednesday (August 12, Beijing time) that its second-quarter profit increased by 33%, slightly exceeding expectations, as lower fuel costs offset the adverse effects of a weaker Canadian dollar.
Headquartered in Montreal, Air Canada is the largest airline in Canada by revenue. The company reported a profit of CAD 296 million (USD 226 million) in the second quarter, or earnings of CAD 1.00 per share. This is an increase from a profit of CAD 223 million, or earnings of CAD 0.75 per share, in the same period last year.
Excluding special items, adjusted profit was CAD 250 million, or earnings of CAD 0.85 per share, an increase of 80% compared to the same period last year, slightly above the CAD 0.84 expected by Thomson Reuters. Revenue was CAD 3.41 billion, an increase of 3%, slightly below the previously expected CAD 3.45 billion by analysts.
Operating expenses in the previous quarter were CAD 3.09 billion, an increase of CAD 31 million, slightly higher. Air Canada explained that the increase was due to a 9.3% rise in passenger traffic and an 8.7% increase in transportation.
Adjusted cost per seat mile increased by 0.7% year-on-year in the previous quarter, in line with expectations. In the third quarter, Air Canada aims to reduce adjusted cost per seat mile by 0.5% to 1.5% compared to the same period last year.
Air Canada emphasized that it hopes this year's major cost estimates will show a slight decrease compared to initial expectations. It aims for a reduction of 1% to 2% in adjusted cost per seat mile, or CASM, compared to the previously expected decrease of 1.5% to 2.5%.
Fuel costs are incurred in US dollars, and Air Canada stated that the adjusted estimates excluding fuel costs and other items largely reflect the impact of a weaker Canadian dollar on operations primarily conducted in US dollars, as a weaker Canadian dollar increases these expenses.