Air Canada eyes global markets for growth

Air Canada eyes global markets for growth

MONTREAL — Air Canada says it expects about 90% of capacity growth to come from international markets this year, about a third from new routes, as the country’s largest airline repositions assets from Western Canada as a result of the downturn in the oilpatch.

“Air Canada is specifically focused on seeking new international growth opportunities to generate increased profit,” said CEO Calin Rovinescu.

Already about two-thirds of the airline’s revenue comes from outside Canada, which Rovinescu said has provided a buffer from the slowdown in markets that rely on the oil industry like Edmonton, Fort McMurray and Calgary.

“We are better immunized from weaknesses in Canada than ever before, including weakness in Alberta,” he said.

He said the company moved fast to respond to the drop in activity caused by low oil prices.

“We reacted very quickly, as you know, to weaknesses that we saw in Western Canada and Alberta. We did it before our other domestic competitors had done likewise, and we moved some capacity out of Alberta last year,” said Rovinescu.

Meanwhile, the low oil prices helped boost the company’s financial results, pushing adjusted annual profit to a record high for the second year in a row.

The airline’s adjusted net income for 2015 was $1.2 billion, more than double the previous record of $531 million in 2014.

Traffic growth of 8.6% in the fourth quarter reflected increases in all of Air Canada’s five geographic markets.

Rovinescu said the low Canadian dollar reduced the number of Canadians flying abroad, but that it had also led to a boost in tourists flying to Canada.

Air Canada also announced Wednesday that it intends to buy up to 75 Bombardier CSeries 300 aircraft, with 45 firm orders and the option to buy 30 more.