highlights........
Air Canada Releases First Quarter Results; Confirms Preliminary Results
Released May 13, 2003
MONTREAL, May 28 /CNW Telbec/ - On May 13, 2003, Air Canada, on an
exceptional basis, released preliminary unaudited consolidated operating
results for the first quarter 2003 and for April 2003. The objective of the
early release was to ensure that Air Canada stakeholders would have its
financial results on as current a basis as possible while Air Canada is
developing its restructuring plan. The airline also released an aggressive
action plan to reduce operating costs until traffic levels stabilize.
As previously announced, for the first quarter ended March 31, 2003, Air
Canada reported an operating loss of $354 million, a $194 million
deterioration from the same quarter in 2002. The average operating loss for
the quarter amounted to just under $4 million per day. Loss before foreign
exchange on long-term monetary items and income taxes was $415 million versus
a loss of $246 million in 2002. The net loss amounted to $270 million compared
to a net loss of $219 million in the first quarter of 2002.
On April 1, 2003, Air Canada obtained an order from the Ontario Superior
Court of Justice providing creditor protection under the Companies' Creditors
Arrangement Act (CCAA). Air Canada also made a concurrent petition under
Section 304 of the U.S. Bankruptcy Code. Refer to Note 1 to the Consolidated
Financial Statements.
As previously reported in the May 13, 2003 press release, the downturn
experienced in the first quarter intensified in April 2003 primarily as a
result of the SARS outbreak in Toronto, Air Canada's main hub, which was
estimated to have negatively impacted revenues by more than $125 million for
the month. The April 2003 preliminary unaudited operating loss is expected to
be $152 million or $123 million worse than the corresponding period last year.
The airline's inability to offset April's revenue loss with corresponding cost
reductions resulted in an operating loss of just over $5 million per day. At
the time of the May 13th release, traffic on Asian routes was experiencing a
decline of approximately 60 per cent and Toronto enplanements were
significantly down. On a network-wide basis, forward bookings for May, June
and July were reported down by 20 to 25 per cent year-over-year. Based on May
2003 traffic and on forward bookings to date, these adverse revenue and
traffic trends are expected to continue, which further underscores the urgency
to restructure under the CCAA process.
As a result of this deteriorating revenue and traffic environment, Air
Canada also announced, on May 13, 2003, the implementation of a number of
actions to reduce operating costs until traffic levels stabilize:
- Reducing overall capacity by 17 per cent year-over-year for June, July
and, on a preliminary basis, August. Asian and transborder routes are
primarily affected with a 60 per cent and 25 per cent reduction,
respectively.
- Cancelling or temporarily suspending services on 13 city pair routes.
- Grounding of approximately 40 aircraft including both widebody and
narrowbody aircraft at the Mainline carrier and turbo prop aircraft at
Air Canada Jazz.
if any one is interested in the rest of the report please email me....it is
a very long post.
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