Air Canada announces plans to buy 75 Bombardier CSeries planes worth $3.8 billion

Air Canada said its costs would fall this year when the Canadian dollar remained unchanged from 2015 levels, and announced plans to buy up to 75 CS300 aircraft from Bombardier Inc as part of an agenda to renew its fleet.

A falling Canadian dollar continues to be weighing on Air Canada since the company makes major purchases such as fuel and planes in dollars.

Canada’s biggest airline said hello expects adjusted cost per average seat mile, which excludes fuel expenses, to fall 2-3 percent this season, “when the worth of the Canadian dollar were at 2015 levels.”

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“The transformative changes we’ve produced in the past few years give to us a cost structure, fleet and flexibility to reply, as we did in 2015, to competitive market conditions, fluctuations within the Canadian dollar and to economic weakness,” Air Canada Leader Calin Rovinescu said in a statement.

Airline companies have been benefiting from a 70 percent fall in oil prices since mid-2014. However the fall can also be affecting interest in airlines in Canada, where a number of people work in oil and related industries.

Rival WestJet Airlines Ltd earlier this month reported a lesser fourth-quarter profit and said its current-quarter revenue per available seat mile, a vital measure of profitability, is poised because of its steepest decline since 2009.

Lower fuel costs helped Air Canada boost its operating margins by 1.5 percentage points within the fourth quarter.

Air Canada said on Wednesday it might purchase 45 of the CS300 aircraft, with an choice to buy an additional 30 planes. Deliveries are scheduled to begin in 2019.

The order would be valued at around US$3.8 billion in line with the list price from the aircraft, Bombardier said.

Air Canada’s net loss widened to $116 million, or 41 cents per share, in the quarter ended Dec. 31, from $100 million, or 35 cents per share, a year earlier.

On an adjusted basis, the company earned 40 cents per share, matching the typical analyst estimate, according to Thomson Reuters I/B/E/S.

Operating revenue rose 2.5 percent to $3.18 billion.
? Thomson Reuters 2016