Jazz Air reports profits rise in Q2

Jazz Air Income Fund (TSX:JAZ.UN) said Wednesday that it earned a second-quarter profit of $25.4 million, up from $23.6 million a year ago.

HALIFAX — Jazz Air Income Fund (TSX:JAZ.UN) said Wednesday that it earned a second-quarter profit of $25.4 million, up from $23.6 million a year ago.

The profit amounted to 21 cents per unit for the quarter ended June 30 compared with a profit of 19 cents per unit a year ago.

Operating revenue was $373.6 million, compared with $409.8 million in the same period last year.

“Despite the economic challenges all companies are facing, I’m very encouraged by the fund’s ability to report again this quarter some of the more positive financial and operational results within the North American aviation industry,” Jazz president and chief executive Joseph Randell said in a statement.

“I’m confident we’ll deliver value to our stakeholders under the terms of our amended capacity purchase agreement with Air Canada.”

Jazz cut its cash distributions to unitholders last month as it announced a new cost-cutting agreement with Air Canada (TSX:AC.B).

The regional carrier will pay a distribution of five cents per unit per month or 60 cents annually, down from an earlier monthly distribution of 8.38 cents per unit.

The cut in distributions followed the new agreement between Canada’s largest airline and the regional carrier that will see the minimum fleet guarantee cut from 133 aircraft to 125.

The current mark up on controllable costs of 16.72 per cent will also be cut to 12.5 per cent for the first 375,000 block hours flown, effective Aug. 1. A five per cent mark up will apply to block hours in excess of 375,000.

The minimum guarantee for the fleet was unchanged at 339,000 block hours.

Units in Jazz, which reported its results after the close of markets, were down 13 cents at $3.40 on the Toronto Stock Exchange on Wednesday.

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