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File photo of Air Canada CEO Calin Rovinescu.Darryl Dyck/The Canadian Press

Air Canada is planning a big expansion in flights to Europe next year, but the Asia-Pacific region holds the brightest long-term promise, chief executive Calin Rovinescu says.

"To the extent folks believe that this is the 'Pacific century' that is about to be upon us, you can assume there is going to be significant growth in the traffic that occurs in the Pacific," Mr. Rovinescu told analysts Friday as the airline reported its best quarterly financial results yet.

There is no immediate plan to launch new routes to Asia, but Air Canada has been awarded access to daytime arrival slots at Tokyo's Haneda Airport, which, because of its closer proximity to downtown Tokyo, is a more desirable airport than Narita, where Air Canada flights currently land.

That is "a very significant development for us," Mr. Rovinescu said. "We expect that will further improve the Japan results."

Montreal-based Air Canada did not reveal when it would start flying to Haneda or from which Canadian cities.

Mr. Rovinescu made his comments as the airline announced results that were better than expected, even after it had said in October its cost performance in the quarter was going to surpass original expectations.

A reduction in costs per average seat mile of 3.4 per cent and an increase in revenue per average seat mile led to adjusted profit $365-million, or $1.29 a share, in the three months ended Sept. 30, from $229-million, or 82 cents, a year earlier.

Final profit, however, slipped to $299-million, or $1.05 a share, from $359-million, or $1.28 a share for the same period last year. (The year-earlier results included a one-time gain.)

Air Canada has trimmed costs by refinancing debt; adding more-efficient Boeing 777-300 extended-range aircraft on some routes; shifting Embraer 175 jets to its Sky Regional partner; and opening its low-cost Rouge unit, whose lower labour costs offset the use of higher-cost older aircraft to vacation destinations.

Expenses, excluding fuel and some other items, should fall further in the fourth quarter, the company said.

The airline is focusing on sustainable profitability, Mr. Rovinescu said. "We are not chasing load factor at any price," he said. "Therefore we are not chasing market share at any price, and we are not chasing traffic at any price. The metric that we are zeroing in on is sustainable profitability, because that's the one that matters most as far as we are concerned."

Some analysts increased their target price for Air Canada's shares. Cameron Doerksen, of National Bank Financial, raised his target price for the airline's shares to $8 from a previous forecast of $4.75.

Air Canada's shares had already blown through that target and jumped again Friday, closing at a five-year high of $6.01 on the Toronto Stock Exchange.

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