Air Canada back in the black in 2010

February 12, 2011

In the final quarter of 2010, airline Air Canada (TSX:AC.B) earnings rose to 134 million, 42 cents per share, capping a sharp return to profitability in 2010.

The year resulted in the company's highest-ever earnings before interest, taxes, depreciation, amortisation, and rent of $1.39 billion, 707 million more than the previous year. Operating income for fourth quarter was reported as $85 million, which compared very favourably with an $83 million loss in 2009.

Only 21 months ago Air Canada was threatened with bankruptcy and using its financial weakness in negotiations with its employees, achieving status quo contracts. With labour contracts scheduled to end this month and next, the strong position of the airlines is expected to stiffen union resolve to share in the increased net revenues.

Those revenues were helped by increasing numbers of passengers and reducing costs, as well as foreign exchange gains. International travel, especially to the Pacific region, led the rises. US travellers through the main Toronto hub more than doubled, indicating the increase in foreign air traffic to and through Canadian airports.