Air Canada to curb U.S. flights, expects loss
(UPDATE: Adds quotes, details, background)
MONTREAL, Sept 17 (Reuters) - Air Canada (Toronto:AC.TO - news) said on Monday it will reduce its flights to the United States by 20 percent and expects a loss instead of breaking even in the third quarter because of concerns about air travel following the deadly attacks in the United States last week.
Canada's largest airline, which ranks 10th in the world, also said its previous financial forecasts for 2001 and 2002 were no longer valid because of ``the unprecedented climate in the airline sector.''
Air Canada also said it might reduce domestic and international flights, as it is continuing the review of its operations.
The carrier did not mention immediate layoffs, even though it said it could be forced to reduce its work force if the situation worsens. The company slashed 7500 jobs, or 16 percent of its work force, earlier this year due to global economic slowdown.
``We must deal with the crisis in which these terrible events have plunged the entire industry,'' Air Canada chief executive Robert Milton said in a release.
``The unspeakable tragedy of last week has made a bad economic situation much, much worse for every airline - Air Canada included, particularly with our large share of the transborder market.''
Air Canada stock was halted on the Toronto Stock Exchange on Monday morning. The stock has lost 38 percent since the reopening of the exchange last Thursday.
Last week's attack hit Air Canada as it was already going through a difficult year because of a drop in business traveling, higher fuel and labor costs. Before last week, the stock has lost more than half its value since January, as the carrier racked up losses of C$276 million.
In August, Air Canada forecast it would break even in its third quarter and to lose money in the following two quarters.
($1 equals $1.57 Canadian) |
