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An Air Canada Jazz jet takes off at the airport in Halifax on Monday, May 24, 2010.ANDREW VAUGHAN/The Canadian Press

Travel rewards program Groupe Aeroplan Inc. reported an increase in second-quarter earnings Wednesday, thanks to significant increase in air traffic and overall strong performance in Canada.

Its quarterly revenue rose by 8.5 per cent, bringing the total revenue to $507.6-million, up from $467.9-million.

This falls short of analyst expectations of $530-million, according to a Thomson Reuters survey.

The Montreal-based company's reported second quarter earnings were $15.3-million, or 7 cents per share, compared to $9.7-million, or 4 cents per share year over year.

"The challenges of the global economy has had some impact, but our Canadian operations today have outperformed our initial expectations," chief executive officer Rupert Duchesne told analysts.

"If we assume no further deterioration in our key markets and continue the positive trend in Canada, we expect to achieve our consolidated guidance for 2011. Just how we get there may look a little different than originally forecasted," he added.

Aeroplan, a former Air Canada subsidiary, allows members to earn and redeem miles through Star Alliance member airlines. More than two million airplane seats are redeemed annually, though the company made it more difficult for members to use miles for exotic locations last month.

"Given the current trend in our Canadian business and the strength we have seen historically in the back half of the year, we are confirming our consolidated guidance," said Mr. Duchesne. Aeroplan continues to seek out small acquisition options for the coming 12-18 months.

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