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Air Canada First Quarter Numbers  
User currently offlineJetset From Canada, joined Jun 2001, 351 posts, RR: 0
Posted (9 years 2 months 2 weeks 3 days 8 hours ago) and read 3630 times:

-Numbers are in .. not to bad in my opinion


Attention Business/Financial Editors:

ACE Aviation Holdings Inc. releases first quarter results
OVERVIEW
- Operating loss of $10 million.
- An improvement of $135 million despite fuel expense being up by
$77 million, compared to an operating loss before reorganization and
restructuring items of $145 million in the first quarter of 2004.
- One of the best first quarter operating results in the Corporation's
history.
- EBITDAR for the quarter of $200 million, an improvement of
$56 million from the prior year.
- Net loss for the quarter of $77 million compared to a net loss of
$304 million in the first quarter of 2004.
- Operating revenues up $56 million or 3 per cent reflecting passenger
revenue increases in all markets with the exception of the US
transborder market.
- Unit cost down 2 per cent, and excluding fuel expense, unit cost
down 6 per cent versus the first quarter of 2004 and down 17 per
cent versus the first quarter of 2002.
- Employee productivity up 21 per cent versus the first quarter of
2002.
- System passenger load factor up 5.1 percentage points to 78.0 per
cent, a record for the first quarter.
- Positive cash flow from operations of $314 million in the quarter.
- As at May 11, 2005, after the successful completion of the public
offerings completed in April and the repayment of the Exit Credit
Facility with General Electric Capital Corporation, ACE's
consolidated cash balances, measured on the basis of cash in its
bank accounts, and short-term investments are approximately
$2.1 billion.
- Additional $300 million of liquidity available from unutilized
revolving credit facility.

MONTREAL, May 13 /CNW Telbec/ - ACE Aviation Holdings Inc. (ACE) reported
today an operating loss of $10 million for the first quarter of 2005, an
improvement of $135 million from the operating loss before reorganization and
restructuring items of $145 million recorded in the first quarter of 2004.
EBITDAR(1) improved $56 million over the 2004 quarter despite a fuel expense
increase of $77 million year-over-year. Operating revenues were up $56 million
or 3 per cent. Passenger traffic, as measured by revenue passenger miles
(RPMs), increased 5 per cent on a capacity decrease of 2 per cent, as measured
by available seat miles (ASMs), resulting in a passenger load factor
improvement of 5.1 percentage points. Passenger revenue per available seat
mile (RASM), on a comparable basis, is up 3 per cent reflecting the
significant improvement in the passenger load factor.
Despite a 23 per cent fuel expense increase in the amount of $77 million,
operating expenses were reduced by $79 million or 3 per cent.
Excluding fuel expense, operating expenses declined $156 million or 8 per
cent over the 2004 quarter reflecting the continued cost reductions that the
Corporation has achieved. Excluding fuel expense, unit cost is down 6 per cent
from the first quarter of 2004 and down 17 per cent compared to the first
quarter of 2002. Including fuel expense, unit cost is down 2 per cent over the
first quarter of 2004. Employee productivity, as measured by available seat
mile per employee, grew 21 per cent when compared to the first quarter of
2002.
Net loss for the quarter was $77 million, an improvement of $227 million
from the first quarter of 2004, which included reorganization and
restructuring items of $132 million.
"Despite record high fuel costs and low North American yields throughout
the period, we are reporting one of the best operating results in Air Canada's
history for the first quarter," said Robert Milton, Chairman, President and
CEO of ACE Aviation Holdings Inc. "It is particularly encouraging to note
that, excluding any benefit of fuel hedging, ACE is the only North American
carrier which had improved results for this quarter, traditionally our worst
quarter of the year.
"Looking forward, ongoing cost reduction initiatives are on track and the
revenue picture is improving. The strengthening yields and record traffic we
achieved in April accelerated our year over year improvement in operating
income and bode well for our revenue performance going forward. We remain
committed to achieving our previously disclosed $1.6 billion EBITDAR target in
2005."
The Corporation continues to expect improved operating and financial
performance during 2005 resulting from revenue enhancement and cost reduction
measures implemented during the restructuring and from additional measures in
the fourth quarter of 2004 and the full year 2005. The Circular and Proxy
Statement dated July 12, 2004 provided an EBITDAR projection of $1.6 billion
for 2005, which was based on an assumed average 2005 crude oil price of
approximately US $35 per barrel for West Texas Intermediate (WTI) crude oil.
While crude oil prices are now estimated to be significantly higher than this
level, the Corporation remains committed to achieving its $1.6 billion EBITDAR
target for 2005 as greater revenues and additional cost savings in specific
areas are forecast to offset higher projected fuel expenses based on internal
estimates. The current record high levels of crude oil and fuel prices exceed
internal estimates and, as fuel prices are subject to many external factors
beyond the Corporation's control, the Corporation may not be able to fully
mitigate the potential adverse effect that this or other factors could have on
the 2005 EBITDAR projection.
"I salute ACE employees who are showing tremendous ownership and pride in
the company's success going forward," said Mr. Milton. "Through their team
effort and hard work, they are winning over more and more customers and I am
proud that throughout the quarter they handled record volumes with exceptional
operational performance. The month of April marked the beginning of a second
year of consecutive record load factors demonstrating a definite trend towards
increasing customer preference for Air Canada over and above the market's
recovery. I also thank our customers whose ongoing loyalty and support has
made Air Canada the airline of choice for Canadians with the lowest fares to
the greatest number of destinations, day in, and day out.
"We're moving ahead on all fronts with the implementation of our fleet
renewal program. The wide-body fleet plan announced earlier in April with
Boeing will move Air Canada into a clear leadership position among North
American international carriers with the acquisition of up to 36 Boeing 777s
and up to 60 Boeing 787 Dreamliners."
The agreement with Boeing is very attractive financially as the operating
costs of the 777 and the 787 will be significantly less than the aircraft they
will replace, the acquisition costs will be spread over several years, and the
asset values of the aircraft we will replace and sell are significant. Both
the 777 and 787 are uniquely suited to meet Air Canada's current route
structure and growth plans, which include long-range, non-stop routes for both
passengers and cargo, with an increasing emphasis on growing markets in Latin
America and China. The operation of the 777 and 787 in the same fleet will
allow Air Canada to tailor capacity to seasonal demand with two aircraft types
that fly the same speed and range yet offer different seating capacities.
"Later this month the initial phase of our North American network and
fleet alignment plan gets underway with the delivery of the first 15
Bombardier CRJ-705 aircraft to Air Canada Jazz. The addition of these jet
aircraft to the Jazz fleet will allow us to boost regional jet service to
communities across Canada thus offering superior comfort, choice in non-stop
markets served as well as more frequencies. Air Canada's fleet will expand by
6 additional wide bodies to accommodate international growth this summer and
17 of the 60 state-of-the-art Embraer aircraft on order will be introduced to
the mainline fleet in the last two quarters of the year," said Mr. Milton.
ACE's Interim Unaudited First Quarter 2005 Consolidated Financial
Statements and Management's Discussion and Analysis (MD&A) are available on
ACE's and Air Canada's website www.aircanada.com and at SEDAR.com on May 13,
2005. A copy may also be obtained on request by contacting Shareholder
Relations at (514) 205-7856.

RGDS/Jetset

15 replies: All unread, jump to last
 
User currently offlineNorthwest 777 From United States of America, joined Sep 2000, 224 posts, RR: 0
Reply 1, posted (9 years 2 months 2 weeks 3 days 8 hours ago) and read 3621 times:

Good job AC! I'm seeing profit for the summer quarter EASILY!

While this is majorly off topic, does anyone know how their SEA flights are doing? They've got a couple Air Canada Jazz Dash 8's going to YVR and at least one (possibly more) daily 320 serive to Toronto I believe it is. Anyone with any info on their SEA service, please let me know, even if just through the Instant message so as not to get too much more off topic already. But once again, Great JOb AC! I didn't read the whole article, I"ll admit, but where there any 'special costs' involved in there, perhaps pretaing to deposits for delivery slots for their new Boeings?

Sorry to get so far off topic guys!  Smile


User currently offlineBriboy From Canada, joined Jul 2001, 366 posts, RR: 1
Reply 2, posted (9 years 2 months 2 weeks 3 days 6 hours ago) and read 3539 times:

Not bad at all. Though I can imagine the pain of having to produce such a small loss. Sooooo close to a profitable Q1, but still impressive.

Deep in the release, it was noted: "Air Canada's fleet will expand by
6 additional wide bodies to accommodate international growth this summer"

Any ideas where / what these aircraft are? I assume 763s?

/Brian



next up: YYC, SFO, SYD, AKL, WLG, CMB, BKK, SIN, FRA, VCE, JFK
User currently offlineCayMan From Canada, joined Aug 2003, 905 posts, RR: 9
Reply 3, posted (9 years 2 months 2 weeks 3 days 6 hours ago) and read 3526 times:

Briboy--

I think I saw this discussed earlier and if memory serves they picked up one A343 (from Air Jamaica perhaps?)--and the rest are 762s/763s--the 762s i think they re-activated from the desert. I am sure someone has better specifics than I do.


User currently offlineBmacleod From Canada, joined Aug 2001, 2243 posts, RR: 0
Reply 4, posted (9 years 2 months 2 weeks 3 days 3 hours ago) and read 3405 times:

I agree $77M is a big jump from 2004 Q1 of $304M and it pales in comparison to DL's staggering $1B-$2B Q1 loss.


The engine is the heart of an airplane, but the pilot is its soul.
User currently offlineSebring From Canada, joined Jul 2004, 1663 posts, RR: 14
Reply 5, posted (9 years 2 months 2 weeks 3 days 2 hours ago) and read 3354 times:

A couple of things to keep in mind.

The Q1 non-operating expense included GECAS interest and a redemption fee on repaying that high yield loan. Q2 non-op expense should decline. A few more cost-saving measures took effect during the quarter and will impact future quarters. And of course, no Jetsgo. The cloud on the horizon would be a UA strike or bankruptcy. Some revenue impact there.


User currently offlineMD11junkie From Argentina, joined May 2005, 3146 posts, RR: 58
Reply 6, posted (9 years 2 months 2 weeks 3 days 2 hours ago) and read 3309 times:

Quoting Bmacleod (Reply 4):
it pales in comparison to DL's staggering $1B-$2B Q1 loss.

This was a one time thing. OPS deficit accounts for 680 million (which is a lot, still) but the company has saved some money. The major problem now is debt obligations and FUEL prices.

Cheers! wave 
Gastón - The MD-11 Junkie



There is no such thing as Boeing vs Airbus as the queen of the skies has three engines, winglets and the sweetest nose!
User currently offlineOlympus69 From Canada, joined Jun 2002, 1737 posts, RR: 7
Reply 7, posted (9 years 2 months 2 weeks 3 days 1 hour ago) and read 3271 times:

Where is Neil to tell us how awful the first quarter operating results are? He classified the $3 million operating loss in the last quarter as 'terrible'. This quarter's $10 million loss is more than 3 times as great, so it must be truly horrendous.  Wow!

User currently offlineYyz717 From Canada, joined Sep 2001, 16245 posts, RR: 56
Reply 8, posted (9 years 2 months 2 weeks 3 days 1 hour ago) and read 3241 times:

Quoting Olympus69 (Reply 7):
Where is Neil to tell us how awful the first quarter operating results are? He classified the $3 million operating loss in the last quarter as 'terrible'. This quarter's $10 million loss is more than 3 times as great, so it must be truly horrendous.

I'm right here John.  Smile

And yes....these numbers are bad. Looking ONLY at year-over-year improvement is but one small piece of the puzzle. These results in and of themselves continue to demonstrate that AC appears structurally unable to make a profit, let alone make investment-grade profits which are the true measure of being able to attract future investment. When was the last time AC reported a quarterly or annual profit? Even with $B of dollars in debt wiped out (on the backs of creditors), AC can still not make money.

How appropriate the latest loss is released on Fri the 13th.

N



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineAC7E7 From Canada, joined Oct 2004, 644 posts, RR: 22
Reply 9, posted (9 years 2 months 2 weeks 3 days ago) and read 3183 times:

Quoting Sebring (Reply 5):
The cloud on the horizon would be a UA strike or bankruptcy. Some revenue impact there.

Perhaps this is a reason why ACE Aviation has been rumoured to purchase up to 25% of a merged US/HP. They see United as a hopeless airline just waiting to die and sees a greater potential in US/HP. Besides, AC has tons of $$$ sitting around.



Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
User currently offlineRP TPA From United States of America, joined Oct 1999, 852 posts, RR: 0
Reply 10, posted (9 years 2 months 2 weeks 1 day 19 hours ago) and read 3009 times:

Are there any accountants in the house who can answer the following:

What's the difference between an operating loss and a net loss? AC had a $10mil operating loss, and a $77mil net loss. What's the story on that $67mil difference?

Also, although they had that operating loss, they reported $314mil " positive cash flow from operations" Again, in layman's terms how is this possible?

Appreciate anyone's help.


User currently offlineEnviroTO From Canada, joined Aug 2004, 825 posts, RR: 0
Reply 11, posted (9 years 2 months 2 weeks 1 day 13 hours ago) and read 2903 times:

One of the best first quarter operating results in the Corporation's
history is a $10M loss? Doesn't sound like a great investment if the best you can expect to do in the first quarter of the year is to loose money. Hopefully the trend of improvements will bring it past the "greatness" of a $10M loss for the first quarter in 2006.


User currently offlineAccargo From Canada, joined Sep 2004, 610 posts, RR: 8
Reply 12, posted (9 years 2 months 2 weeks 1 day 6 hours ago) and read 2824 times:

Quoting EnviroTO (Reply 11):
One of the best first quarter operating results in the Corporation's
history is a $10M loss? Doesn't sound like a great investment if the best you can expect to do in the first quarter of the year is to loose money. Hopefully the trend of improvements will bring it past the "greatness" of a $10M loss for the first quarter in 2006.

While I agree that it would be much better to have no loss at all, the first quarter is historically the slowest period for airlines in Canada and the US. The high cost of fuel impacted the results significantly, and was the main reason for the loss, and with the additional cost savings forecast for 2005, the airline is on track for it's forecasted profit for the year.


User currently offlineACYWG From Canada, joined Feb 2005, 265 posts, RR: 0
Reply 13, posted (9 years 2 months 2 weeks 1 day 4 hours ago) and read 2773 times:

Quoting Yyz717 (Reply 8):
And yes....these numbers are bad. Looking ONLY at year-over-year improvement is but one small piece of the puzzle. These results in and of themselves continue to demonstrate that AC appears structurally unable to make a profit, let alone make investment-grade profits which are the true measure of being able to attract future investment.

Well, since Westjet recently (a month or so ago) posted a loss in Excess of 10 million, then I'm not concerned. If an airline such as Air Canada which is orders of magnitude larger can post smaller losses than Westjet, Who's really the worse off?


User currently offlineYyz717 From Canada, joined Sep 2001, 16245 posts, RR: 56
Reply 14, posted (9 years 2 months 2 weeks 1 day 2 hours ago) and read 2717 times:

Quoting ACYWG (Reply 13):
Quoting Yyz717 (Reply 8):
And yes....these numbers are bad. Looking ONLY at year-over-year improvement is but one small piece of the puzzle. These results in and of themselves continue to demonstrate that AC appears structurally unable to make a profit, let alone make investment-grade profits which are the true measure of being able to attract future investment.

Well, since Westjet recently (a month or so ago) posted a loss in Excess of 10 million, then I'm not concerned. If an airline such as Air Canada which is orders of magnitude larger can post smaller losses than Westjet, Who's really the worse off?

WJ has been profitable consistently. The recent loss was an aberration. AC has been consistently UNprofitable and remains so, despite its emergence from CCAA.

Until AC can produce investment grade returns (ie, an operating margin and a net margin in the 5%+ range), AC will remain a business that is arguably not a going-concern in the long run. Given that AC cannot even produce ANY profit (let alone an investment grade profit) suggests that the future for AC is not good.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineYeggerman From Canada, joined Mar 2005, 143 posts, RR: 0
Reply 15, posted (9 years 2 months 2 weeks 1 day 2 hours ago) and read 2697 times:

Quoting ACYWG (Reply 13):
Well, since Westjet recently (a month or so ago) posted a loss in Excess of 10 million, then I'm not concerned. If an airline such as Air Canada which is orders of magnitude larger can post smaller losses than Westjet, Who's really the worse off?

Well let's see, WS overall loss for Q1 was only 9.6mil, in comparison to AC operating loss of 10mil and overall loss of 77mil... your right I really do wonder who is better off.... anyone know the last time AC posted a profit??



"All great things must come to an end"
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