Air Canada posts massive drop in operating income

Air Canada experienced a 92 percent drop in its operating income during the second quarter of the current calendar year, according to Aviation Week. Much of this dramatic decline has been caused by the significant rise in fuel prices since the beginning of the year. While Air Canada’s profits stood at around $7 million during the second quarter, this figure for the same period last year reached $88 million.

Despite these troubling numbers, Montie Brewer, Air Canada’s chief executive officer (CEO) indicated that he was satisfied with the flag carrier’s performance, especially since the entire airline industry is experiencing highly challenging times, due to the rising price of oil and economic concerns, which have convinced some to cancel their holidays and stay at home. Brewer, however, warned that even more challenging times may be ahead for the Canadian national airline, especially as demand is expected to weaken and oil prices will likely remain quite high during the third and fourth quarters. Ticket prices are almost certain to increase, as Air Canada tries to tackle rising fuel costs.

Air Canada Jazz, the carrier’s regional operator, has also experienced a decline in revenue, amounting to approximately 32.4 percent. Similarly to the mainline airline, Jazz has seen a dramatic increase in its fuel-related expenditures and this is behind the decline.

Thank you to Aviation Week for the initial report.

www.aircanada.com