Air Canada says its new loyalty program will help to increase share price further

MONTREAL — Air Canada’s move to launch its own loyalty program in 2020 will help to attract more foreign investors who will bolster its stock price, CEO Calin Rovinescu said Monday.

Air Canada said it is negotiating with potential credit card partners and expects to announce a decision by year-end. The airline served notice last year that it does not plan to renew its 30-plus year partnership with Aimia Inc.-operated Aeroplan when the current contract ends in 2020.

Rovinescu said the industry as a whole isn’t fully rewarded because past airline bankruptcies on both sides of border made such investments risky.

But he said its decision not to renew its Aeroplan partnership will deliver up to about $2.5 billion of value for investors.

“That can actually go a long way to eliminating that multiple differential that exists with the U.S. carriers,” he said.

Chief financial officer Michael Rousseau added that the share price should also be helped as it attracts more investors from the U.S., Europe and Asia. Currently, 42 per cent of its shareholders are from outside of Canada.

Air Canada said it is preparing to deploy its Rouge low-cost airplanes on routes to Western Canada to compete with ultra-low-cost rivals.

The first routes will be between Montreal and Victoria, along with Toronto to Nanaimo and Kamloops, B.C., starting in June.

Three more planes will be added to the Rouge fleet, bringing it to 53 aircraft. One of the planes will be used to replace a regional aircraft.

The larger Rouge plane will reduce costs by decreasing the number of daily flights on that route.

WestJet Airlines is preparing to launch its Swoop ultra-low-cost airline in June to compete with Flair Airlines and other carriers preparing to start service.

Meanwhile, Air Canada is preparing to increase capacity if required to address opportunities resulting from a potential strike by WestJet pilots.

Air Canada reported a smaller-than-expected loss in its first quarter as its revenue grew compared with a year ago, boosted by increased capacity and passenger traffic.

The Montreal-based airline said it lost $170 million or 62 cents per diluted share for the quarter compared with a loss of $13 million or five cents per share in the same quarter last year.

Operating revenue for the quarter totalled a record $4.07 billion, up from $3.64 billion as it experience strong performance in most geographies and particularly in the business cabin.

Chief executive Calin Rovinescu told analysts that the strong results were achieved despite higher costs resulting from winter service disruptions.

“Despite these challenges, our first quarter performance demonstrates our ability to perform against headwinds and our progress towards consistent earnings and long-term sustained profitability,” he said.

The most recent quarter included losses on foreign exchange of $112 million compared with gains on foreign exchange of $70 million in the first quarter of 2017.

On an adjusted basis, Air Canada said it lost $52 million or 19 cents per diluted share compared with an adjusted loss of $63 million or 23 cents per diluted share a year ago.

Analysts on average had expected an adjusted loss of 44 cents per share for the quarter, according to Thomson Reuters.

Companies in this story: (TSX:AC, TSX:WJA)

Just Posted

Vandal strikes downtown business

Window with PRIDE poster broken

No new RNs hired to Red Deer hospital emergency department in a month: United Nurses of Alberta

UNA filed a grievance in June in response to what they say is a staffing crisis

Traffic pattern to change for summer near interchange

Southbound Hwy 2 traffic to be shifted

Red Deer couple win $100,000 in lottery

Couple won their money on June 1 LOTTO MAX with EXTRA draw

‘Walking survey’ of Red Deer’s green carts starts this week

Gold stars or pointers on correct use will be left on inspected carts

Updated: SUV smashes through fences and deck in Anders

Driver taken to hospital after SUV veered off 30th Avenue into Anders

Cull hasn’t been able to solve bunny burden in Alberta mountain town of Canmore

CANMORE, Alta. — Problems persist in an Alberta mountain town overrun with… Continue reading

Canada should help Holocaust denier on trial in Germany: civil liberties group

OTTAWA — A civil liberties group is urging the Canadian government to… Continue reading

Westerner Days: Send us your photos

Your reader photo may just make the pages of the Adovcate.

Adam Henrique signs $29.1M, 5-year extension with Ducks

ANAHEIM, Calif. — Centre Adam Henrique has signed a $29.1 million, five-year… Continue reading

Fashion firms upend design routine to focus on speed, trends

NEW YORK — Prototypes? Passe. Fashion company Betabrand saw that knitwear was… Continue reading

Trimming and tidying: Perennials need care too

The great attraction in growing perennial flowers is that you never have… Continue reading

Johnny Depp settles lawsuits involving former managers

LOS ANGELES — Johnny Depp has settled lawsuits with his former business… Continue reading

Cubs’ Kyle Schwarber falls to Bryce Harper in Home Run Derby final

WASHINGTON — Nationals Park was eerily quiet late Monday when Kyle Schwarber… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month