Air Canada reported a first-quarter net loss of C$34 million (US$30.7 million), narrowed from a net loss of C$126 million in the year-ago quarter, on a 5.9% increase in revenue to C$2.53 billion.

President and CEO Montie Brewer, noting that the first quarter is "traditionally the industry's weakest period" and that fuel costs were high, called the results "solid" and pointed to year-over-year improvement. "Performance in the domestic market, in particular, excelled," he said.

Operating loss for the period was C$78 million, narrowed from an operating deficit of C$124 million in the year-ago quarter. Traffic grew 5% to 11.81 billion RPMs on a 3% lift in capacity to 14.74 billion ASMs, producing a load factor of 80.2%, up 1.5 points. Yield rose 2% to 18 cents as RASM climbed 3% to C17.2 cents and CASM increased 1% to C17.7 cents. CASM excluding fuel was up 1% to C13.8 cents.

Air Canada parent ACE Aviation Holdings posted a net loss of C$72 million for the quarter, reversed from net income of C$118 million in the year-ago quarter. Year-ago results included a C$220 million gain resulting from ACE's IPO of Jazz in January 2006.

Jazz reported a first-quarter net income gain of 5.5% to C$35.3 million. Revenue increased 13.8% to C$364.2 million as expenses grew 15.2% to C$43.2 million, producing operating income of C$36.3 million, up 2.8%. Jazz officials attributed the robust performance in part to the addition of nine new aircraft and a 12.1% lift in block hours flown. The regional carrier derives 99% of its income from its capacity purchase agreement with AC.