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(Bloomberg) — Air Canada released a dimmer outlook for full-year earnings on Tuesday as it grapples with surging jet fuel prices in the wake of the Iran war.
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The country’s largest airline now forecasts adjusted earnings before interest, tax, depreciation and amortization of C$2.9 billion ($2.08 billion) to C$3.2 billion this year. It suspended guidance in April after the start of the war, but before that predicted Ebitda of C$3.35 billion to C$3.75 billion.
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Outgoing Chief Executive Officer Michael Rousseau said jet fuel expenses in the second quarter were 49% higher than the same period last year.
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The airline also disclosed that funds managed by Blackstone Inc. and other investors would pay C$2.5 billion for a quarter stake in its loyalty service Aeroplan, confirming a Bloomberg News report from earlier this week.
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Proceeds from the sale would repay an upcoming $1.2 billion bond maturity, the company said. The investor group included Le Caisse de Depot et Placement du Quebec, PSP Investments and British Columbia Investment Management Corporation.
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In Tuesday trading, Air Canada shares rose 5.9% in Toronto to close at C$27.27, the highest level since June 2021, after the airline was upgraded on the Aeroplan news. The stock is up by more than 40% over the past year.
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The Montreal-based company in July named Anko van der Werff as CEO following Rousseau’s retirement announcement, and he’s set to start by the end of January 2027.
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Rousseau sparked public outcry earlier this year when he spoke mostly English in a video sharing condolences for the death of two pilots in New York, one of whom was from the French-speaking province of Quebec.
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Air Canada’s second-quarter revenue grew 11% year-on-year to C$6.27 billion, ahead of an estimated C$6.17 billion forecast by analysts in a Bloomberg survey.
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Despite that, the company swung to an operating loss of C$215 million versus C$117 million operating income in the previous quarter. Adjusted quarterly Ebitda was C$719 million, beating analyst expectations, but down from C$909 million a year ago.
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