MONTREAL — Air Canada (TSX:AC.B) is planning deeper cost cutting, including possible route and fleet reductions as it attempts to restore its profitability in the face of ongoing economic turbulence.
The country’s largest carrier has doubled to $500 million the annualized cost reductions and revenue enhancements expected within three years.
An internal tactical team will implement more than 100 initiatives to reduce costs by about $400 million, including $50 million this year and $250 million in 2010. It also plans to increase revenues by $100 million.
Falling passenger travel, particularly among business and premium groups caused the Montreal-based carrier to record a $113 million operating loss in the second quarter, reversing year-earlier operating profits of $7 million.