-Numbers are in .. not to bad in my opinion
Attention Business/Financial Editors:
Aviation Holdings Inc. releases first quarter results
- 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
- 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
- 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
- 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
consolidated cash balances, measured on the basis of cash in its
bank accounts, and short-term investments are approximately
- Additional $300 million of liquidity available from unutilized
revolving credit facility.
MONTREAL, May 13 /CNW
Telbec/ - ACE
Aviation Holdings Inc. (ACE
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
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
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.
's Interim Unaudited First Quarter 2005 Consolidated Financial
Statements and Management's Discussion and Analysis (MD&A) are available on
'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.