Company Watch - Air Canada.

Nov 20, 2006

ACE Aviation To Sell Minority Stake In Air Canada. ACE said on Thursday it will sell a minority stake in its main operating unit, Air Canada, for up to CAD$605 million (USD$528 million), marking the return of the country's dominant airline to the public market. Nov 17, 2006

Air Canada Shares Slide On Market Debut. Shares in Air Canada dropped nearly 7 percent on Friday as the country's dominant airline debuted on the Toronto Stock Exchange after public offerings worth CAD$605 million (USD$530 million), a larger deal than expected. Nov 17, 2006

Air Canada net income included a C$102 million special charge related to Air Canada's obligations for the redemption of frequent flyer miles and a C$52 million gain thanks to the sale of more than 1 million US Airways shares. Excluding charges, the airline had a 10.3% operating margin. Nov 13, 2006

Air Canada passenger revenues were up 4% thanks to increases in all markets, except transatlantic routes. North American services accounted for all passenger revenue growth as the carrier boosted capacity by 9%, mostly on transborder routes, while reducing international capacity 1%. Canadian domestic revenues were up 4%, thanks to more capacity as unit revenues remained unchanged. More than half of the increased capacity was on transcontinental routes, with the remainder split equally between routes in Western Canada and the Maritimes. Nov 13, 2006

Air Canada Q3 profit hurt by change. Air Canada reported a smaller third-quarter profit related to a charge from the redemption of points at its Aeroplan customer loyalty program. Net income fell 62% to $91.1 million. Nov 13, 2006

Air Canada revenues on transatlantic routes decreased 3% as capacity was cut 6% and RASM improved 2%. About 50% of the revenue decline was due to the London terrorist threat in August. Yields rose 3% despite a hit from currency changes. Pacific revenues rose 2%. Nov 13, 2006

Air Canada third-quarter profit falls 62%. Falling operating income and a C$102 million ($90.2 million) noncash pre-tax charge related to the redemption of Aeroplan miles issued before 2002 weighed heavily on ACE Aviation's bottom line as the Air Canada parent reported a third-quarter profit of C$103 million, down 62% from C$271 million earned in the year-ago period. Nov 13, 2006

Air Canada's expenses rose 5.5%, with fuel accounting for almost two-thirds of that amount. As capacity went up 3%, unit costs increased 2%. Excluding fuel, CASM fell 1%. "This quarterly unit cost improvement demonstrates increasing traction in cost control," Dunne said. Fuel was up 13% as the price paid increased 9%. Air Canada is hedged 58% for November and December and 26% for 2007. Nov 13, 2006

Air Canada's U.S. transborder revenues were up 14%, driven by 20% more capacity and a unit revenue decline of 5%, mostly related to yield. The growth in capacity was aimed at long-haul routes with "very strong demand, especially to California, and to leisure markets, such as Las Vegas and Florida," said CFO Brian Dunne. "A significant increase in average stage length, currency and the expansion in more price-sensitive leisure markets all contributed to lower the average yield." Nov 13, 2006

Air Canada and Air Canada Jazz flew a combined 3.95 billion RPMs in October, a 4.6% increase over the year-ago month. Capacity climbed 3.8% to 5.03 billion ASMs and load factor was up 0.6 point to 78.4%. Nov 13, 2006

Editor: Aram Gesar, eMail: [e-mail]

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Nov 13, 2006