(Reuters) - Air Canada, the country's biggest carrier, reported a third-quarter loss on an adjusted basis, hurt by lower passenger revenue, and said it does not expect to see a full recovery for another 12 months to 18 months.
The Montreal-based company said it earned C$277 million ($260.3 million), or C$2.44 a share, in the three months to the end of September. That compares with a net loss of C$132 million, or $1.32 a share, in the same period a year earlier.
On an adjusted basis, the airline reported a loss of 19 Canadian cents a share.
Operating results continued to be hurt by ongoing weak economic conditions resulting in declines in passenger and cargo revenues, the company said in a statement.
Operating revenue fell 13 percent to C$2.67 billion. Passenger revenue was down 13 per cent to $2.4 billion, due to a drop in yield as a result of reduced traffic and competitive pricing initiatives.
In the third quarter, traffic dropped 2 percent on a 3.3 percent cut in capacity.
For the full year, the company expects its system capacity, as measured in available seat miles (ASM), to decline by 4.25 percent to 4.75 percent. That compares with an August forecast of a reduction of between 4.5 percent and 5.5 percent.
Domestic ASM capacity is expected to fall by 3.5 percent to 4.0 per cent in 2009, the company said.
Faced with an industry-wide slowdown, Air Canada raised C$1 billion in July from lenders including the government and won a temporary pension deficit payment reprieve from its labor unions. Last month, it raised C$250 million in a share issue to increase its working capital.
The company, which competes domestically with WestJet Airlines Ltd, faces concerns over its heavy debt load, big pension deficit and high cost structure.
Shares in Air Canada closed at C$1.12 on the Toronto Stock Exchange on Thursday.
(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Aradhana Aravindan)
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