March 24, 2010
Air Canada plans to go well beyond the CAD$500 million (USD$490 million) in cost cuts and new revenue-generating activities it set for itself as a goal by the end of 2011, the company’s chief financial officer said on Wednesday.
Canada’s biggest airline has so far cut costs or generated new revenues totalling CAD$223 million in 2010, Michael Rousseau said. Its target for the year is CAD$270 million.
Including 2009 savings, Rousseau said the company had achieved CAD$256 million of the full CAD$500 million goal.
“We will not stop there,” he said. “We are not going to be satisfied hitting CAD$500 million. We know of some things within our control and there is an incredible effort within the entire company to drive out costs.”
Last month, Air Canada reported fourth-quarter results that topped analysts’ expectations as it beat its cost-cutting target for the period.
Air Canada’s operating costs are about 30 percent higher than those of its main domestic competitor, WestJet Airlines.
Rousseau said Air Canada has no plans to shrink itself to help improve cash flows.
“We like our root structure, we know the economy is coming back and we are comfortable with where we are at this point in time,” he said in response to a question from an analyst.
From a balance sheet perspective, he said the company is in sound shape.
“We still have financing opportunities,” he said, adding that “at this point in time, we don’t think we need that money. It’s relatively expensive money as well.”
(Reuters)