Air Canada profit soars as weak dollar impacts airline's bottom line

Air Canada's second quarter profit came in at $296 million, up 33 per cent from last year's level, the Montreal-based airline revealed Wednesday.

The loonie's decline boosted the airline's cost for fuel and other items by $134 million, because jet fuel is priced in U.S. dollars. But the loonie was great news for the airline in other ways, such as boosting passenger revenues by $61 million based on foreign travellers whose ticket fares then get converted into more Canadian dollars.

All in all, the airline's revenue for the three months was $3.414 billion, up $109 million from the second quarter of 2014.

The airline's president and CEO, Calin Rovinescu, said the second quarter results delivered results from efforts to reduce operating costs and he expects more record results in the third quarter ending Sept. 30.

"Demand continues to be robust moving into, historically, our most important quarter given the travel demands and patterns of our North American customers," Rovinescu said.

"Our capacity additions for the year, which are largely in our international markets, are important contributors to our increased profits and remain consistent with our plan established in a higher fuel price environment."

The airline set a record for adjusted net income of $250 million or 85 cents per share, one cent better than what analysts were expecting.

Its net income amounted to $1 per diluted share, up from 75 cents per share or $223 million in the second quarter of 2014.

Last year's second quarter revenue was $3.305 billion and adjusted net income was $139 million.