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Air Canada profits fall as COVID-19 recovery drags on

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MONTREAL – Air Canada saw its profits fall by half even while its revenue rose in its latest quarter, as the country’s largest airline struggled to complete the final stages of its recovery from COVID-19.

“Our second-quarter results were solid, although they did not achieve our internal expectations,” CEO Michael Rousseau told analysts on a conference call Wednesday.

Higher capacity and strong demand for international flights drove a year-over-year revenue growth of two per cent to $5.52 billion in the quarter ended June 30.

But revenue-per-seat figures dropped compared with the year before, when soaring post-pandemic demand and lower capacity across the industry made for fuller planes, higher fares and wider profit margins.

As a result, net income in Air Canada’s second quarter fell 51 per cent year-over-year to $410 million.

Operating expenses that stood nine per cent above those of a year earlier also help account for the plunge, as the cost of jet fuel and labour rose, chief financial officer John Di Bert said.

Despite ongoing growth, Air Canada’s post-COVID-19 rebound remains incomplete four and a half years after borders closed and lockdowns began.

“We’re still not back to 2019 levels in terms of scale and the size of the airline,” Di Bert said.

Air Canada’s adjusted earnings notched slightly higher in the second quarter of 2019 than five years later. The size of the carrier’s fleet is also smaller with 356 planes as of June 30, compared with 400 in the second quarter of 2019, although many of the scrapped aircraft were smaller, older and less efficient.

Last Friday the company’s share price sank to $14.90, a closing low not struck since October 2020.

“Like our shareholders, we’re disappointed with our stock price performance here … especially coming off our record 2023 and having completely repaired the balance sheet. We also know that most global airline stocks are having similar challenges,” Rousseau said.

National Bank analyst Cameron Doerksen said Air Canada’s stock will likely remain under pressure until it reaches a new contract with its pilots, though he added the share price reflects an “overly pessimistic outlook.”

Earlier this year, executives said corporate travel would help fuel profits in 2024, even as pandemic habits of video conferencing and remote work proved tough to shake.

Premium products — business cabin and premium economy fares — accounted for 30 per cent of passenger revenue growth in Air Canada’s first quarter. The tickets yield fatter profit margins than lower-tier seats.

Momentum on that front has continued, particularly in Canada-U.S. travel, said Mark Galardo, head of revenue and network planning. “That being said, we’re still about 25 to 30 per cent below where we were in 2019.”

As competitors flocked to transatlantic routes, Air Canada cut its capacity for trips across the pond by about eight per cent and shifted planes to Asia, where it ramped up flight volumes by a third. Two new routes — Toronto to Seoul, South Korea, and Montreal to Osaka, Japan — did “exceedingly well,” Galardo said.

However, hurdles in the Pacific remain. They include China’s tight restrictions on tour group visits to Canada and a Russian airspace ban that forces Canadian carriers to take a longer route to Asia, adding significant fuel and labour costs.

“Too early to say what we see in 2025 because some variables are outside of our control like capacity to and from China. But I think you can expect the Pacific to continue to be relatively robust all the way to the end of the year,” Galardo said.

The airline plans to pursue a “measured approach” to expansion, he added. It had only two more planes in its fleet last quarter than the year before. But it also locked down leases on eight Boeing 737 Max 8s, set to hit the tarmac next summer.

On an adjusted basis, the Montreal-based company earned 98 cents per diluted share, down from an adjusted profit of $1.85 per diluted share in the same quarter a year ago. The result beat analysts’ recent expectations of 92 cents per diluted share. But it also came after Air Canada lowered its 2024 financial forecast in late July, saying its planes have not been as full as anticipated due in part to tough competition in international markets.

In its outlook Wednesday, the airline said it plans to increase its flight capacity in the third quarter by between four and 4.5 per cent compared with the same quarter in 2023.

This report by The Canadian Press was first published Aug. 7, 2024.

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Canada’s Denis Shapovalov wins Belgrade Open for his second ATP Tour title

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BELGRADE, Serbia – Canada’s Denis Shapovalov is back in the winner’s circle.

The 25-year-old Shapovalov beat Serbia’s Hamad Medjedovic 6-4, 6-4 in the Belgrade Open final on Saturday.

It’s Shapovalov’s second ATP Tour title after winning the Stockholm Open in 2019. He is the first Canadian to win an ATP Tour-level title this season.

His last appearance in a tournament final was in Vienna in 2022.

Shapovalov missed the second half of last season due to injury and spent most of this year regaining his best level of play.

He came through qualifying in Belgrade and dropped just one set on his way to winning the trophy.

Shapovalov’s best results this season were at ATP 500 events in Washington and Basel, where he reached the quarterfinals.

Medjedovic was playing in his first-ever ATP Tour final.

The 21-year-old, who won the Next Gen ATP Finals presented by PIF title last year, ends 2024 holding a 9-8 tour-level record on the season.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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Talks to resume in B.C. port dispute in bid to end multi-day lockout

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VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.

The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.

The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.

The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.

The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.

MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.

In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.

“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.

“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”

In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.

“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.

The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.

“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”

The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.

The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.

A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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The Royal Canadian Legion turns to Amazon for annual poppy campaign boost

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The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.

Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.

Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.

Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.

“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.

“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”

Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.

“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.

Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.

“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”

But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.

Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.

“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.

Paddon said the initiative is a great idea, but she would like to have known more about it.

The legion also sells a larger collection of items at poppystore.ca.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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