Air Canada (TSE:AC.B), the nation's largest airline, declined in morning trade after reporting a bigger-than-expected loss in the first quarter, impacted by a weak Canadian dollar and a severe winter.
The shares were down 1.5 percent at $8.10 at 9:55 a.m. in Toronto. The stock has nearly quadrupled in the past 12 months.
Net loss widened to C$341 million, or C$1.20 per share, in the three months ended March 31, from C$260 million, or 95 Canadian cents per share, a year earlier, the Montreal, Quebec-based company said in a statement today.
Excluding the impact of foreign exchange fluctuations and other one-time items, the company's net loss narrowed to 46 Canadian cents per share, from 52 Canadian cents per share a year earlier.
Analysts on average predicted a net loss of 45 Canadian cents per share, according to Thomson Reuters.
The company hasn’t reported a first-quarter profit since it returned to the stock market in late 2006, according to Bloomberg.
First-quarter revenue rose to $3.065 billion from $2.952 billion year-over-year.
Air Canada is pushing to minimize the impact of a weak currency on jet fuel and other U.S.-dollar-denominated expenses through measures such as more favorable maintenance agreements and a surcharge on vacation packages.
The drop in the value of the Canadian dollar led to a foreign exchange loss of C$161 million in the quarter.
The airline operates an average of about 1,520 daily national and international flights and had an average load factor—a measure of how full planes are—of 80.3 percent for the first quarter.
The airline said today that it now expects its adjusted cost per available seat mile, or CASM, to drop 3 percent to 4 percent in the full year, compared with a previous forecast of a 2.5 percent to 3.5 percent drop. CASM fell 2.5 per cent in the first quarter.
Air Canada also said it has abandoned plans to replace 25 narrow-bodied planes with newer models. The move is a blow to the Bombardier Inc. (TSE:BBD.B) C Series, which was in the running for the order. Bombardier's shares sank 2.6 percent to C$4.09.
Air Canada plans to refurbish 18 of its 777 planes beginning in 2015. It will add a premium economy class to those planes and upgrade business class so that it conforms to the same standards as the new 787 planes.
Delivery of the first new 787 will take place on Sunday.