Canadian Charter carrier Royal Airlines expects to add C$100 million ($66 million) a year in revenue from a recent agreement to carry most of the passengers for Signature Vacations of Toronto. Under the agreement, previously held by rival airline Canada 3000, Signature will fill 75% of four Royal Airbus A310-300s and seven Boeing 757-200s.
Royal is also upgrading part of its 17-strong fleet with newer aircraft, says president Michel Leblanc, which will see two leased Boeing 727-200s returned in November, and six 757s added by December. Four of the 757s are being taken on short term lease from the UK's Air 2000, with which Royal is now linked through Signature - an affiliate of the UK charter's airline's tour operator parent, First Choice.
Royal picked up about C$2 million-worth of business from the 13-day Air Canada pilots' strike which ended earlier this month. It was not enough, however, to compensate for a loss of C$4.6 million for the first quarter ended 31 July, compared with a profit of C$1.6 million a year earlier. Revenue rose to C$67.9 million from C$55 million.
It was the third consecutive quarter of losses for Royal, which flies to 23 destinations in Canada and 55 outside the country. Leblanc blames the latest loss on higher operating costs caused by a weak Canadian dollar and lower European traffic.
The airline earned a total of C$3 million last year on revenue of C$224 million. Despite the setback, one industry analyst expects Royal to end the year with a profit of around C$11.4 million on revenue of C$350 million.
Source: Flight International
