January 22, 2014 - 4:44 AM
MONTREAL - Air Canada (TSX:AC.A) says its domestic pension plans had a small surplus as of Jan. 1, according to preliminary estimates — contrasting with the $3.7-billion solvency deficit that they had a year earlier.
The airline says several factors contributed to the turnaround, including a 13.8 per cent return on investments in 2013.
Air Canada also applied a different ratio for calculating future pension obligations, reduced obligations through benefit amendments and made a $225-million contribution towards the solvency deficit.
Pension obligations have been a major drag on Canada's largest airline for many years, resulting in friction with Air Canada's labour unions at times as well as a significant operating expense.
The company says a final estimate of the domestic pension's financial health will be completed by the end of June.
News from © The Canadian Press, 2014