AIR CANADA SEES BOOST IN THIRD-QUARTER INCOME

AIR CANADA SEES BOOST IN THIRD-QUARTER INCOME

   Air Canada, that nation’s largest airline, reported third-quarter net
income of C$124 million ($83.1 million), compared with a loss of C$61
million ($40.9 million) for the same period in 1998).
   Operating income was C$244 million ($163.5 million), C$251 million
higher than the year-earlier period. Operating revenues rose 21 percent to C$313 million
($209.7 million).
   The third quarter of 1998 was impacted by a pilot strike which grounded Air
Canada’s operations for nearly two weeks in September. Excluding the estimated $212
million in losses due to the strike, third quarter 1999 net income rose C$52 million
($34.8 million) and operating income rose 19 percent or C$39 million ($26.1 million).
   Air Canada’s management board is fighting a bid to shareholders made by Onex
to buy and merge Air Canada with weaker rival Canadian Airlines International. Onex has
made the bid with the backing of American Airlines’ parent company AMR Corp.
   Last week, Air Canada announced that alliance partners United Airlines,
Lufthansa and CIBC would fund a C$800-million ($536 million) buy-back of 35 percent of the
outstanding shares of the company. Air Canada also has offered to buy the shares of
Canadian Airlines for $2 per share.
   For the first nine months of 1999, Air Canada "recorded its best-ever
operating income and highest operating margin since the airlines was
privatized in 1988," said Robert A. Milton, president and chief executive officer.
   January-September earnings were C$200 million ($134.0 million), compared with
C$4 million the year earlier. Excluding the estimated impact of the pilot strike,
year-to-date earnings improved C$63 million ($42.2 million). Operating income was C$412
million ($276.0 million) for the period, C$267 million greater than 1998 (C$55 million
after removing the pilot strike impact).