Air Canada Reports $727 Million Fourth Quarter Net Loss

Air Canada reported a fourth quarter operating loss of $146 million compared to operating income of $72 million in the same quarter in 2007. Fuel expense increased $177 million or 29 percent from the fourth quarter of 2007. Passenger revenue decreased $14 million or 1 percent from the fourth quarter of 2007 due to a decline in traffic.

Excluding fuel expense, unit cost increased 9.9 per cent from the fourth quarter of 2007. The impact of a weaker Canadian dollar versus the U.S. dollar in the quarter was a major contributing factor to the increase in CASM, excluding fuel expense.

The airline reported a net loss of $727 million compared to net income of $35 million in the fourth quarter of 2007. The net loss for the fourth quarter included net losses on foreign exchange of $527 million.

For the full year of 2009, Air Canada reported an operating loss (before a provision for cargo investigations) of $39 million compared to operating income of $433 million in 2007. Fuel expense increased $867 million or 34 per cent to $3.4 billion in 2008.

Passenger revenues of $9.7 billion increased $384 million, or 4 percent, mainly due to increased fares and fuel surcharges to partially offset significantly higher fuel prices.

For the full year, Air Canada reported a net loss of $1,025 million compared to net income of $429 million in 2007. The airline’s net loss for 2008 included a net loss on foreign exchange of $655 million, while 2007 included net gains on foreign exchange of $317 million.