AC cuts operating loss......

[Kip Powick]

Air Canada reported Friday that it cut its operating loss, excluding its Jazz subsidiary, to $5-million in the fourth quarter of 2006, from a loss $92-million in the fourth quarter of 2005.

Passenger revenues were up 6 per cent, to $122-million, because of greater capacity and increased traffic, the airline reported Friday.

The passenger load factor — at 77.8 per cent of capacity — was a record load factor for the fourth quarter, Air Canada said.

Operating income for the year was $114-million, compared with $191-million in 2005. Operating income, excluding special charges, was $236-million in 2006, “despite an increase in fuel expenses of $347-million, or 16 per cent,” the company said.

Passenger revenues for the year were up 8 per cent to $690-million.

Air Canada president and chief executive officer Monte Brewer characterized the financial performance as “one of the strongest fourth quarters in Air Canada's history. . .

“Our results are on track following our third consecutive year of record load factors as we continue to renew our fleet,” he said. Customers are reacting favourably to “our value-based fare products” and distribution costs have been significantly reduced and are now more in line with the leading low-cost carriers, Mr. Brewer said.

Jazz reported operating income of $144-million for the full year, up from $129-million in 2005, he said.

Air Canada's parent company, ACE Aviation Holdings Inc., reported fourth-quarter operating income of $73-million, compared with an operating loss of $34-million in the fourth quarter of 2005.

The company said the results reflect improvements in all segments of its business, including Air Canada, Jazz and Aeroplan.