MONTREAL, Oct. 15 /CNW Telbec/ - ACE Aviation Holdings Inc. will be
releasing unaudited consolidated third quarter financial statements of Air
Canada by November 15, 2004. Pending this release, the Corporation is
announcing its estimated unaudited consolidated operating income in order to
provide current information to stakeholders on its recent operations given
record high fuel prices and the deteriorated performance of US carriers.
The Corporation expects to record an estimated $235 million of unaudited
consolidated operating income before reorganization and restructuring items
for the third quarter of 2004. This estimate represents a major improvement
from the $17 million of operating income before restructuring and
reorganization items reported in the third quarter of 2003.
ACE Aviation Holdings Inc. Chairman, President and CEO Robert Milton
expressed satisfaction with the results. "Against the current background of
record oil prices, our estimated third quarter operating profit of
$235 million reflects the tremendous progress made by Air Canada's employees
over the last eighteen months of restructuring," said Mr. Milton. "Revenues
are strong and unit costs are down, even in the face of a 41 per cent rise in
base fuel prices. These results would have been further improved had post-
emergence accounting been in effect.
"The airline again posted a record load factor every month this quarter
while operating at strong on time performance and flight completion levels.
While the third quarter is our seasonally strongest quarter, the results
achieved point to an airline that is not only profitable in a difficult fuel
and North American yield environment, but also to an airline that is running
well operationally.
"Our new business model and product strategy is producing the desired
results and we are seeing growing customer confidence in Air Canada as the
airline of choice for the lowest fares to the greatest number of destinations
on an everyday basis.
"The progress reported today was made possible through the hard work,
dedication and sheer resilience of Air Canada's employees. I thank them for
their ongoing support and willingness to accept the necessary change to ensure
the airline's successful restructuring. And on behalf of all of us at Air
Canada, I thank each and every customer who supported us during the past
eighteen months. We remain committed to earn their ongoing loyalty through
excellent customer service and as always an uncompromising focus on safety,"
concluded Mr. Milton.
As a result of higher overall system traffic and yield, consolidated
passenger revenues have shown a marked recovery in all markets with the
exception of the US transborder market. Air Canada estimates that consolidated
system passenger revenues will increase by approximately 12 per cent over the
third quarter of 2003. Passenger revenue per ASM (RASM) is expected to be up
approximately 6 per cent over 2003 levels.
Air Canada anticipates unit cost reductions of approximately 4 per cent
from the same quarter last year (11 per cent excluding fuel) on an ASM
capacity increase of 6 per cent. These unit cost reductions are mainly due to
cost reduction initiatives undertaken during the restructuring process which
largely began to take effect in the third quarter of 2003.
Current record high fuel prices are a concern, however, the increase in
fuel expense has been partially mitigated by a fuel surcharge in effect on US
transborder and international travel and by a stronger Canadian dollar.
As at October 13, 2004, the Corporation's consolidated cash balance,
measured on the basis of cash in its bank accounts, amounted to approximately
$1.9 billion.
As in prior quarters, as a result of restructuring under CCAA, the third
quarter 2004 results will reflect a number of very significant reorganization
and restructuring charges directly associated with the restructuring which
will be included in net income. Air Canada's complete 2004 third quarter
results will be made available on Air Canada's website aircanada.com and at
SEDAR.com by November 15, 2004. A copy may also be obtained on request by contacting Shareholder Relations at (514) 422-7578.