Aug 7 (Reuters) - Air Canada ( ACDVF ) said it would

redeploy capacity to Asia Pacific routes on softer European

demand, after reporting a lower second-quarter profit that came

in ahead of analysts' estimates on Wednesday.

North American carriers are trying to control costs while

protecting pricing power, as a rush to cash in on booming demand

for summer travel left them with excess capacity and softer

fares in certain markets. Air Canada ( ACDVF ) shares opened down 2%.

Mark Galardo, Air Canada's ( ACDVF ) executive vice president, revenue

& network planning, told analysts he expects stronger demand for

Pacific routes in the back half of 2024.

"We're very happy with the margins that we're driving,"

Galardo said. "I think you can expect the Pacific to continue to

be relatively robust all into the end of the year."

Canada's largest carrier is also reviewing the impact of its

network schedules on lucrative corporate travel which is showing

momentum, but still up to 30% below 2019 levels.

Last month, the carrier cut its full-year core profit

forecast, citing a lower-yield environment and competition in

international markets.

Montreal-based Air Canada ( ACDVF ) said it plans to increase its

available seat mile capacity during the third quarter to between

4% and 4.5%, compared with the same three months in 2023.

Airlines are also facing heightened labor and maintenance

costs. Air Canada ( ACDVF ) is negotiating with pilots who want to narrow

a pay gap with higher-paid aviators at major U.S. airlines.

Air Canada ( ACDVF ) CEO Mike Rousseau told analysts that agreements

have to be "cost-competitive in the Canadian environment for us

to be successful."

The carrier's adjusted profit fell to C$369 million

($268.52 million) or C$0.98 adjusted earnings per diluted share,

from C$664 million, or C$1.85 per share, a year earlier.

Analysts on average were estimating adjusted earnings per

diluted share of C$0.92 per share, according to LSEG data.

The carrier is also part of a larger consortium bidding on

high-frequency rail services in Canada. Its presence generated

criticism from a transportation advocacy group over a possible

conflict of interest. Air Canada ( ACDVF ) declined to comment on the

project.

($1 = 1.3742 Canadian dollars)