(Adds third-quarter details, compares results with estimates)
Oct 31 (Reuters) - Air Canada, the country's biggest airline operator, reported a lower-than-expected quarterly profit on Wednesday, hurt by higher fuel costs.
The company's fuel costs per litre rose 39.7 percent in the third quarter from a year earlier.
Air Canada and other carriers are contending with rising fuel costs that is weighing on profits, even as demand for air travel is strong. To combat that higher cost, airlines have increased ticket prices and hiked baggage fees.
Air Canada said traffic rose 7.5 percent and passenger revenue per available seat mile, a key revenue measure for airlines, increased about 4 percent.
On an adjusted basis, the company earned C$2.03 per share, missing the average analyst estimate of C$2.09, according to Refinitiv data.
The Montreal-based airline said its profit fell to C$645 million ($491 million), or C$2.34 per share, in the quarter ended Sept. 30, from C$1.72 billion, or C$6.22 per share, a year earlier.
In the year-ago quarter, Air Canada had recorded a tax gain of C$793 million.
Operating revenue rose nearly 11 percent to C$5.42 billion. ($1 = C$1.31) (Reporting by Debroop Roy in Bengaluru; Editing by James Emmanuel and Maju Samuel)