Air Canada shares hit their highest point in stock in more than a year on last Friday. This is achieved by their cost cutting plan and a strong load factor.

As stated by the carrier in Air Canada, the cost per available mile decrease by between 3 and 3.5 percent compare with the cost in last year. They decreased costs in many aspects including food, beverages, distributions and supply. Furthermore, the revenue generated by the Pacific market contributed a lot to stronger the highest point of their stock. Air Canada has expanded their international market by increasing the number of international flights and flaying routes. The airline’s system load factor which used to measure the average filled seats across the flights also decreased compare with last year.

The good out come generated form reaching highest stock value leaded by the costs cutting is not only internal but also external. For internal benefit, the cost saving lead bigger difference between revenue and cost, in other words, profit is increased. However, the customer’s satisfaction might decrease. For the external gain is that both CIBC and BMO increased their target share price of Air Canada. 

Resources:http://www.bnn.ca/News/2013/10/4/Air-Canada-shares-rally-on-lower-costs-higher-loads.aspx