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Air Canada reaches 52-week high on Q3 forecast

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As a reflection of Air Canada's (TSE:AC.B) expense-reduction strategy, and based on its latest load factor results and CASM estimates, the carrier expects a rise in its adjusted third quarter net income from the same period last year.

Shares soared as much as 13.6% Friday morning to a 52-week intraday high on the news.

While the airline did not provide specific guidance, its adjusted profit would likely top the $230 million it earned in 2012's third quarter. This year's third quarter results will be released on November 6.

In its update, Air Canada said it expects its cost per available seat miles to drop between 3% to 3.5% in the third quarter as a result of a reduction of an assortment of operating expenses.

As a result, the airline carrier now expects its full-year 2013 adjusted CASM to decline in the range of 1.5 to 2.0% from last year, compared to the previous prediction of a 1% to 2% decrease. The new quarterly projection represents a wider fall from the 1.5% to 2.5% estimated drop made in August.

Air Canada expects both its full-year 2013 system and domestic average seat miles capacity to increase in the range of 1.5 to 2.5%, compared to the full-year 2012, unchanged from previous guidance.

For the year, the airline says depreciation, amortization and impairment expenses will decrease $115 million, aircraft maintenance expenses will fall $40 million and employee benefits expenses will increase $70 million from 2012.

In addition to its cost forecasts, Air Canada said it load factor dipped in September to 83.2%, versus 84.9% in the same month last year. Its load factor for the third quarter was 86.2%, slightly down from a record of 86.3% for the same quarter last year. System traffic for September increased 1.9%, as system-wide capacity increased of 3.9%.

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