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Air Canada’s fortunes on the upswing: Rovinescu

"It ruins none of the gains that we're making," Calin Rovinescu told reporters after addressing the Canadian Club of Montreal.

The country's largest airline has boosted its profits,
launched a low-cost carrier, wiped out its large pension deficit and has
seen its stock more than triple in the past year.

Yet, it attracted prominent headlines
after misplacing the sporting equipment, denying a flight to an Alberta
soldier with post-traumatic stress disorder, losing a dog it was
transporting and seeing the flight plans of thousands of customers
disrupted when severe winter weather hit Toronto.

"Like in every single one of the airlines
that operate in the world, there will be an occasional situation…but
in the overall scale of things, when you look at the success — best
airline in North America, best performing stock on the stock exchange,
best airline in Canada for business travel — I think that we're on the
right path."

Earlier, Rovinescu told
the business leaders that 2013 was a great year in which Air Canada
demonstrated that it can be a "sustainably profitable global company"
and a "brand ambassador for both Canada and commercial aviation."

Air Canada announced Monday that it was
adding new routes and additional flights from Toronto and Montreal to
sun destinations on its low-cost Rouge subsidiary this spring and summer
as it continues to transfer older aircraft from its main fleet.

Montreal will benefit the most with 36
per cent more seats being available and 20 per cent more flights with
the introduction of Rouge flights to resort destinations in Cuba, Mexico
and Haiti.

New Rouge destinations from Toronto include Tampa, Fla., Barbados and Nassau.

Rovinescu said the addition of more
year-round Caribbean destinations to Air Canada Rouge's network enables
the carrier to compete more effectively on these routes because Rouge
operates at 21 to 29 per cent lower cost than using the same planes in
the mainline fleet.

Air Canada is also
increasing competition to Europe next summer by expanding capacity by 30
per cent. It will fly more Boeing 777s outfitted with more seats to
major cities and add new destinations on Rouge from Canada's two largest
cities. Athens, Barcelona, Dublin, Edinburgh, Lisbon, Manchester and
Venice will be serviced from Toronto while flights from Montreal will
include Athens, Barcelona, Rome and Nice.

The head of Trudeau International Airport said the changes are "encouraging."

"There's a lot of lift going to Europe
this summer so there's lots of good opportunities," Aeroports de
Montreal CEO James Cherry said following the speech.

Transat A.T. has said it will
increase transatlantic capacity by two per cent next summer. WestJet  is also launching service to Dublin from Toronto and St.
John's, NL.

Analyst David Tyerman of Canaccord Genuity said there is a risk for all carriers that increased capacity will weaken yields.

"It's going to come down to route by route. Ireland sounds like it's definitely going to be a battle."

Meanwhile, Rovinescu said Bombardier's
decision to delay the entry into service of its CSeries commercial jet
won't affect the airline's decision on whether it will select the
aircraft to complete the replacement of its narrowbody fleet.

"I think it's going to be a very good
airplane no matter what and the delays in and of themselves are not
something that are a factor at this stage for us," he said, adding that
he hopes to know more by July.

Rovinescu also said reversing a large
pension solvency deficit has been achieved earlier than expected and
that efforts to add new routes to China from Montreal are being delayed
by the lack of available landing slots and suitable flight connections.