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Air Canada’s AC-T top executive sounded an optimistic note about the coming months in a speech to shareholders Monday, even as the war in Ukraine and soaring fuel prices dampen the industry’s outlook.

Michael Rousseau, the chief executive officer of Air Canada, said Canada’s largest airline plans to operate at 90 per cent of its prepandemic capacity this summer, restoring routes cut during the pandemic and flying to 33 international destinations.

Mr. Rousseau, speaking at the company’s webcast annual meeting of shareholders, pointed to rising revenue, reduced expenses and $10.4-billion in cash and other liquid assets.

“It is apparent the recovery is accelerating,” he said.

Operating revenue rose to $2.7-billion in the fourth quarter of 2021 – a threefold increase over the same period of 2020. The airline’s overall expenses for 2021 fell $160-million even as fuel costs rose 20 per cent.

Still, Air Canada lost $3.6-billion in 2021 and $4.6-billion in 2020 as the pandemic halted most air travel. By way of comparison, its profit was $1.4-billion in 2019.

Russia’s invasion of Ukraine has dampened demand for air travel, especially in Europe, and driven jet fuel prices to levels not seen since 2008, said a report from Naveo, a British consultancy. Prices for fuel, which is typically among an airline’s top two expenses, have doubled over the past year and are up about 33 per cent in the past month. This means airlines, including Air Canada, that do not have a fuel hedging program are facing a sudden surge in costs, Naveo said in its report.

Mr. Rousseau did not provide details on the impact of higher fuel costs but said 79 older planes have been retired and more fuel-efficient aircraft are being added, including last week’s announcement of 26 Airbus A321 Neo models.

“Cost control is always a top priority, but with rising fuel prices it is taking on even greater importance,” he said.

Markets are awaiting Air Canada’s investor presentation on March 30 for details on the company’s longer-term forecast.

Walter Spracklin, a stock analyst at Royal Bank of Canada, said he expects the tone of Wednesday’s event to be positive, as the airline slowly emerges from two years of travel restrictions. The key, Mr. Spracklin said in a note to clients, will be how management views the sustainability of demand for leisure travel after the initial pent-up demand is satisfied, as well as the outlook for a recovery in business travel.

“This is important given international and business travel were drivers of profitability prepandemic,” Mr. Spracklin said.

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