Toronto, Aug 8 (Inditop.com) Air Canada, the world’s ninth largest airline, Friday reported a second quarter profit of $155 million — 27 percent up from the same period last year.
During this period, the airline also reported foreign exchange gains of $355 million as against $48 million during the same period last year.
However, the struggling national carrier, which was on the verge of seeking second bankruptcy protection in six years, still posted an operating loss of $113 million as against a profit of $7 million during the same period last year.
Air Canada said its revenue shrunk by 16 percent to $2.06 billion due to the continuing recession worldwide.
The airline had posted a record loss of $727 million in the fourth quarter of 2008 because of higher fuel costs and the global slowdown. To cut losses, the airline axed hundreds of staff and cut many international and North American flights.
It got $1 billion in financing to streamline its operations.
Air Canada CEO Calin Rovinescu said Friday that the airline will further step up cost-cutting to stop losses.
“We are now targeting $500 million in annual revenue and cost reduction initiatives, double our previously announced target. The vast majority, $400 million of the $500 million, relate to cost reductions. We expect $50 million to be achieved in 2009, $250 million by 2010 and the full $500 million by 2011 on a run rate basis,” he said.
The Air Canada boss added: “We have also launched a series of customer-focussed initiatives including a last-minute paid upgrade programme and the expansion of interline baggage agreements, in addition to more opportunities for Aeroplan members to redeem reward travel and the elimination of call centre fees.”
Facing stiff competition from the private WestJet, the airline has also increased incentives for passengers and travel agents.
With about 24,000 staff worldwide and operations to nearly 80 international destinations, Air Canada is the world’s ninth largest airline.
