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Air Canada expects 1st-qtr margins to halve as fuel costs rise

By Reuters

Published: 07:59 EST, 17 February 2017 | Updated: 07:59 EST, 17 February 2017

Feb 17 (Reuters) - Air Canada reported a bigger quarterly loss and said it expected its margins to halve in the current quarter from a year ago, as fuel costs inch up with the rise in oil prices.

The carrier's fuel cost per litre rose 1.4 percent in the fourth quarter ended Dec.31.

However, adjusted cost per available seat mile (CASM), which excludes fuel costs and unusual items, fell by about 6 percent, helping the company post a better-than-expected adjusted profit.

Air Canada said it expected adjusted CASM to decrease by 3.25-4.75 percent in the first quarter.

The company's earnings before interest, taxes, depreciation, amortization and aircraft rent (EBITDAR) margin is likely to be about 7 percent in the current quarter, compared with about 13.8 percent last year.

Net loss widened to C$179 million ($136.8 million), or 66 Canadian cents per share, in the latest quarter from C$116 million, or 41 Canadian cents per share, a year earlier.

Excluding items, the company earned 14 Canadian cents per share, above the average analyst estimate of 7 Canadian cents per share, according to Thomson Reuters I/B/E/S.

The Montreal-based airline's revenue rose 7.6 percent to C$3.43 billion, also beating analysts' average estimate of C$3.39 billion.

($1 = 1.3082 Canadian dollars) (Reporting by Komal Khettry in Bengaluru; Editing by Anil D'Silva)

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Larry Whyte
Larry Whyte

He is a leading authority on business trends including ‘big data’, self-employment and the social media revolution. He’s the author of the award-winning book, Marketing Shortcuts for the Self-Employed (2011, Wiley) and a regular speaker for Bloomberg TV. He has spoken about global mega trends, big data and the social media revolution at conferences and business events around the world .

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