Aero News reports ” What A Difference A Year Makes: Air Canada Makes $300 Million Profit” highlighting that Air Canada, fresh out of bankruptcy, was able to turn the tables and reap a tremendous profit last year.
A profit of any kind for a full-service airline like Air Canada has been nearly unheard of lately, as other North American carriers struggle with high fuel prices and either the reality — or looming threat — of bankruptcy.
In fact, having cash on hand for the year is an anomaly usually reserved only for low-cost carriers such as Southwest Airlines — so how did Air Canada do it?
According to the London Free Press, a lot of it had to do with the airline’s parent company, ACE Aviation Holding, selling off over 14 percent of its Aeroplan customer loyalty program in a June IPO — that alone raised almost $288 million.
It’s also of note that profits aren’t unheard of for Canadian carriers. One of Air Canada’s main competitors, Calgary-based WestJet Airlines, also posted healthy profits for 2005 — but that’s not unusual, as the low-cost carrier has been a consistent money-maker.
Still, a profit is a profit, especially in a year that saw soaring fuel prices and not one, but two new bankruptcies among the other major carriers.
US Airlines are struggling, mostly due to a variety of reasons including mismanagement, and US citizens are paying the penalty for their struggle with higher ticket prices, no food service or onboard paid food service, serious luggage restrictions, and other pinches that tend to make airline travel not much fun.
Still, outside of the US, the airline industry is booming. While the US blames high fuel costs, the cost of fuel is even higher outside of the states, so why are foreign airlines doing booming business?
