TORONTO - Air Canada on Thursday reported operating income of C$75 million ($73.5 million) in the second quarter of 2010 compared to an operating loss of $113 million in the second quarter of 2009, an improvement of $188 million, the company said in a news release.
"I am pleased to report stronger second quarter results that underscore the progress we've made on maximizing revenues and reducing costs, and also reflect encouraging signs of a gradual economic recovery," said Calin Rovinescu, President and Chief Executive Officer.
Passenger revenues increased $256 million or 12 percent from the second quarter of 2009 due to an 8.7-percent growth in traffic and a 3.3-percent improvement in yield. A strengthening economy, combined with revenue generation initiatives attributable to Air Canada's Cost Transformation Program (the "CTP") contributed to the improved result.
"Asian and European markets in which we added capacity are performing well, led by our Pacific routes which recorded a 37- percent increase in revenue from the previous year's quarter on strong traffic and yield growth," said Rovinescu.
However, operating expenses increased $107 million or four percent from the second quarter of 2009, mainly due to the capacity growth, higher fuel prices year-over-year, as well as increases in pension and commission expenses, said Rovinescu.
Partially offsetting these increases was the impact of a stronger Canadian dollar on foreign currencies compared to the second quarter of 2009, which is estimated to have reduced operating expenses by $151 million from the same period in 2009, as well as a reduction in aircraft maintenance expense year-over-year.
Raymond Zhou
Op Rana
Berlin Fang
Zhu Yuan
Huang Xiangyang
Chen Weihua