Air Canada shares fell to their lowest level in more than 10 weeks after the Canadian flag carrier said yields would continue to decline this year.
Air Canada shares fell 8.1% to C$8.51 in Toronto, its lowest closing level since May 27th. The drop was the biggest since June 12th.
The airline stated that yield, or average fare per mile, declined 2.1% in the second quarter.
CEO Calin Rovinescu said yields will continue to fall this year as the airline adds more economy class seats in an attempt to boost profit.
Rovinescu told local media: “We are purposely looking at having a lower yield. That is part of the strategy here as we look to have a greater bottom line.”
Air Canada also increased its 2014 cost-cutting target this year, with the stated intent of increasing profit by 15% over five years by expanding the company’s “Rouge” LCC subsidiary.
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