Air Canada posted a larger first-quarter loss than projected on Thursday, citing higher operating costs related to labor and aircraft maintenance, overshadowing early signs of a recovery in corporate demand. Air Canada’s shares fell 9% to C$18.58 in afternoon trading in Toronto.

North American carriers are grappling with rising expenses as they add flights and run older, less fuel-efficient planes, while a lack of new aircraft makes it difficult to benefit on robust travel demand.

According to Mark Galardo, Air Canada’s vice president of network planning, corporate demand is up 10% to 20% year on year into the second quarter, with new demand coming from the technology industry.

“We’re starting to see some very encouraging signals in corporate demand,” Galardo told analysts.

Canada’s largest airline did not experience the same first-quarter bounce in corporate travel that lifted U.S. airline profitability.

Montreal-based Air Canada has also stated that it is negotiating compensation with RTX engine manufacturer Pratt & Whitney following issues with its geared turbofan engines, which have grounded seven of its A220 planes.

The carrier, which is currently in contract talks with its pilots, reported a 21% increase in labor expenses during the quarter.

Air Canada’s operating expenses increased 6% to C$5.22 billion ($3.80 billion), the airline reported, despite a revival in significant spending by corporate clients who had been mostly absent from the post-pandemic travel boom.

The airline confirmed its 2024 core profit estimate, estimating adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of C$3.7 billion to C$4.2 billion.

Air Canada posted a first-quarter adjusted loss of C$0.27 per share, compared to analysts’ average projections of a C$0.07 loss, according to LSEG data. Its quarterly operating revenue increased 7% to C$5.23 billion, exceeding Wall Street’s estimate of C$5.19 billion.

Air Canada walks back new seat selection policy

Air Canada has temporarily rescinded its proposal to levy a new seat selection fee for passengers booked on the lowest rates. Customers with rates that did not include free seat selection prior to check-in were randomly given a seat at check-in, with the option to change to another available seat for free, CTV News reports

However, some Air Canada customers received alerts earlier this month that the airline would soon charge travelers standard or basic rates to change their automatically allocated seats at check-in.

Kerry Berlinquette, an Ontario-based travel agency, posted a photograph of a warning she received on April 18 on her Facebook page.

“We’re introducing a new seating assignment process for Standard or Basic Fares,” according to the announcement.

“When customers enter the check-in flow, our system will automatically assign a free seat for those who have not purchased a seat in advance.” If customers want to alter their automatically allocated seat, they can do so for a charge.

“It stinks. It was awful enough having to compete for a seat 24 hours before the flight. “Just another money grab,” one Facebook user said in response to Berlinquette’s post.

“It’s frustrating when traditional airlines behave like budget airlines,” a Reddit user commented on April 24. “They have abolished free checked baggage, and now they have removed the chance to select free seats upon check-in. “What will happen next?”

The message, which said that the change will take effect on April 24, sparked a flood of complaints from furious customers on Facebook, X, and Reddit.

Following significant criticism, Air Canada sent a comment (opens in a new tab) to airline industry news website Pax News, confirming the policy change.

“What has changed, and is consistent with our branded fares, is that after seats are assigned at check-in for no fee, customers who now wish to change to a different seat from the one we assigned them will have to pay the same fee they would have paid prior to check-in,” the airline wrote to Pax News. The airline would continue to assign seats to ensure families on the same booking are seated together for no fee, as per Canada’s Air Passenger Protection Regulations.

“This is the practice at other airlines, including some in Canada.”

However, on April 26, Air Canada suspended the new cost. The flag carrier refused to clarify whether consumer backlash had influenced the decision and declined to address CTVNews.ca’s queries about why it had implemented the fee and how long the pause would stay.

“We paused the implementation for operational reasons to ensure a smooth rollout for our customers and employees,” an unnamed spokesman told CTVNews.ca in an email on Monday.

“We will communicate next steps at the appropriate time.”

Air Canada would not be the first Canadian airline to impose a price for seat selection after check-in. However, airlines that charge a seat selection fee, such as Flair and Porter, are typically low-cost carriers with lower base tickets than Canada’s flag carrier.

One exception is WestJet, Canada’s second-largest airline after Air Canada, which charges a price for seat selection.

Source: Reuters, CTV

KUALA LUMPUR, Malaysia — Microsoft CEO Satya Nadella announced Thursday that the company will invest $2.2 billion over the next four years in Malaysia’s new cloud and artificial intelligence infrastructure, as well as cooperate with the government to develop a national AI center.

It is Microsoft’s single greatest investment in Malaysia as the tech giant looks to increase support for AI development in the region and worldwide.

Microsoft Will Invest $2.2 Billion In Cloud And AI Services In Malaysia

“We are committed to supporting Malaysia’s AI transformation and ensuring it benefits all Malaysians,” the prime minister added. Our investments in digital infrastructure and skilling will help Malaysian businesses, communities, and developers apply the latest technology to drive inclusive economic growth and innovation across the country.”

During a visit to Indonesia on Tuesday as part of his Southeast Asia tour, Nadella announced a $1.7 billion investment in cloud and AI services. On Wednesday, he announced that Microsoft would establish its first regional data center in Thailand.

In April, the IT behemoth announced a $2.9 billion investment in Japan and a $1.5 billion investment in Abu Dhabi-based AI business G42.

Microsoft promised to deliver AI training to 2.5 million people in Malaysia, Indonesia, the Philippines, Thailand, and Vietnam by 2025.

Microsoft Will Invest $2.2 Billion In Cloud And AI Services In Malaysia

Nadella previously met with Prime Minister Anwar Ibrahim, who stated that the investment will be a critical support pillar for the government’s goal of increasing AI capabilities in Malaysia.

Anwar announced on Facebook that the new investment will involve:

• AI training for another 300,000 individuals.
• The construction of a national AI center of excellence.
• The dancing the nation’s cybersecurity capabilities and ass.

Assistance with with Malaysia’s developer community. 

Microsoft operates one of the world’s largest cloud computing operations and has ventured into artificial intelligence through its cooperation with OpenAI, the creators of ChatGPT.Since then, Microsoft has added an AI assistant called Copilot to its Microsoft Edge browser, which helped it increase revenues by 20% in the first quarter.

Microsoft Will Invest $2.2 Billion In Cloud And AI Services In Malaysia

Microsoft sees Southeast Asia, a population of over 600 million people, as a developing market and a possible place for further AI product development. According to a study by multinational consulting firm Kearney, artificial intelligence might add over $1 trillion to Southeast Asia’s GDP by 2030. Indonesia is anticipated to receive $366 billion, followed by Malaysia with $115 billion.

Microsoft stated that the investment in Malaysia will supplement its 2021 agenda to promote equitable economic growth. It stated that the proposed national AI center will accelerate AI deployment in major businesses and the public sector while assuring AI governance and regulatory compliance.

“Together with Microsoft, we look forward to creating more opportunities for our (small and medium-sized enterprises) and better paying jobs for our people as we ride the AI revolution to fast-track Malaysia’s digitally empowered growth journey,” Zafrul Aziz, trade minister of Malaysia

SOURCE – (AP)

MEXICO CITY — Cartier, the luxury jewelry brand, is not known for giving out gifts, but in the case of one Mexican guy, they pretty much did.

Rogelio Villarreal was browsing Cartier’s website when he stumbled upon an offer that appeared too good to be true. “I broke out in a cold sweat,” he posted on his X account, previously known as Twitter.

Luxury Jewelry Maker Cartier Doesn’t Give Stuff Away, But They Pretty Much Did For One Man In Mexico

Cartier made a mistake and advertised gold-and-diamond earrings for 237 pesos ($14) rather than the exact price of 237,000 pesos ($14,000). Villarreal ordered two sets.

What ensued was months of back-and-forth, during which he claimed Cartier offered him a consolation gift instead of the jewelry, and Mexican officials supported his argument that the corporation should uphold the listed price.

Villarreal eventually received the earrings last week at his price, and he posted a video online of himself unwrapping them. But he quickly grew tired of the public attention, realizing that not all that glitters is gold, and posted on Monday, “Alright already, talk about something else, I’m tired of the earrings being the only thing anyone knows about my personality.”

Villarreal’s case had become a lightning rod online during a particularly polarizing period in Mexico, ahead of the June 2 presidential elections.

Some onlookers chastised Villarreal for taking advantage of what they perceived as a genuine error by the high-end jewelry manufacturer. Some claimed he should return the earrings or pay taxes on them. Some called him a thief.

Luxury Jewelry Maker Cartier Doesn’t Give Stuff Away, But They Pretty Much Did For One Man In Mexico

Villarreal, a doctor doing his medical residency, claimed he had to fight for months to get the company to deliver and that it offered to give him a bottle of champagne instead.

The corporation did not reply to inquiries for comment.

“I have the worst luck in the world, and I’ve never made any money, and what I do have is because I bought it,” Villarreal posted on social media. However, he could now purchase two $14,000 sets of earrings for only around $28.

He says he gave one of them to his mom.

“It feels great and it’s cool not to be the underdog for once in my life,” Villarreal said.

Profeco’s representative, Jesús Montaño, validated Villarreal’s account of his struggle.

Luxury Jewelry Maker Cartier Doesn’t Give Stuff Away, But They Pretty Much Did For One Man In Mexico

“He filed a complaint in December,” Montaño explained. “There is a conciliation hearing scheduled for May 3, but the consumer already received his purchase.”

When asked about ethics, Montaño stated that corporations “have to respect the published price.” If an error occurs, “it’s not the consumer’s fault.”

SOURCE – (AP)