Canadian Airlines quarterly loss balloons to $255.9 million
CALGARY (CP) - Now operating under bankruptcy shelter and awaiting a full takeover by Air Canada, Canadian Airlines Corp. reported late Monday a net loss of $255.9 million in the first quarter. That represented a loss of $5.26 a share and compared with a net loss of $107.8 million or $2.39 a share a year earlier.
The loss, including provisions of $80.4 million for financial restructuring, came despite preliminary efforts to reduce unprofitable flying and after quick cost-saving initiatives totalling about $53 million.
Revenue dropped to $669 million from $703.7 million after seating capacity was cut 11.4 per cent.
Canadian said its operating expenses before restructuring costs were $822.5 million, an increase of 2.1 per cent.
"Higher oil prices were the biggest factor, resulting in a 45.1 per cent increase in fuel expense from $93.8 million to $136.1 million as fuel price increases of $56 million were partially offset by volume related reductions." the company said.
Restructuring expenses resulted primarily from the decision to retire DC-10 aircraft and subsidiary Canadian Regional Airlines' ATR 42 aircraft, as well as costs relating to the cancellation of A320 aircraft deliveries.
On April 3, Canadian and Air Canada began integrating routes and schedules into one network. They also launched 13 new routes and plan 19 more in coming months.
Meetings of the airline's creditors will be held in Calgary on May 26 to consider a restructuring plan. If they approve, the plan will go to an Alberta court June 5 and could become effective June 15.
Air Canada , now managing Canadian through a subsidiary's stock holding, is set to take over its former rival if debt restructuring goes through.
On the Toronto stock market, Canadian Airlines shares closed Monday at 62 cents apiece, unchanged. A month ago, they traded at $1.30.