Montreal–based Air Canada also lost ground, reporting an 82% year-over-year drop in its operating revenues for the third quarter. Most of this loss was attributed to a significant work stoppage that hit its bottom line. The airline brought in operating revenues of… $5.77 billion. Still, that’s a drop of around five percent from last year’s record high of $6.1 billion.
Northwest’s results for their quarter ended September 30th were heavily influenced by a three-day work stoppage. This work stoppage, which saw more than 10,000 flight attendants walk the picket line in August. This disruption was so severe, it resulted in the cancellation of over 3,000 flights, eviscerating the airline’s operations and financial performance. Prior to the end of the strike, Air Canada had already calculated strike losses at $375 million to date.
Air Canada had the most quarter-to-quarter improvement, going from -51% last quarter to -37% this quarter. Consequently, the company’s diluted earnings per share plummeted to 88 cents, down dramatically from $5.38 in the comparable quarter last year. Indeed the fundamental weakness in the airline’s performance caused it to cut its full-year guidance again in September, which illustrates the combustive unknowns still lurking inside its operational framework.
Air Canada’s financial pressures are pronounced because of a sharp drop in revenues and earnings. First, ongoing labor disputes continue to disrupt its service delivery. The dramatic decline in operating income illustrates the impact of outside forces on the airline’s bottom line. This new development begs serious questions about the airline’s long term recovery plan going forward.
