(Corrects to fix company ticker in first paragraph)
Aug 7 (Reuters) - Air Canada posted a quarterly profit, driven by aggressive cost-cutting, fuller planes and a C$41 million ($37.5 million) tax gain.
Air Canada has reported losses in 18 of the last 25 quarters as it struggles with labor disputes, pension bills, increasing competition and the collapse of its Aveos maintenance unit.
Adjusted cost per available seat mile (CASM) - a measure of how much an airline spends to fly a passenger, excluding fuel - fell nearly 5 percent.
The company said it expects CASM to decline slightly more this year than what it had predicted in May. It now expects a fall of 3.2-4.2 percent, down from 3-4 percent.
"We have ... seen a marked increase in the number of international and U.S.-originating customers choosing Air Canada for their global travel plans," Chief Executive Calin Rovinescu said in a statement.
Under a plan to improve earnings, Air Canada is expanding its low-cost vacation carrier, Rouge, reconfiguring its fleet and continuing a cost-cutting plan that is expected to save more than C$100 million annually, within the next five years.
The Montreal-based carrier, Canada's largest, posted a net profit of C$223 million, or 75 Canadian cents per share, for the three months ended June 30.
It lost C$23 million, or 9 Canadian cents per share, in the same quarter last year.
The Canadian dollar weakened to C$1.09 against $1 (USD), from C$1.04 over the past year.
Closely-watched EBITDAR, or earnings before interest, taxes, depreciation, amortization and impairment, and aircraft rent, rose more than 18 percent to C$456 million.
Air Canada said in May that it expected a strong summer travel season, based on forward bookings at the time.
The airlines' cost-cutting efforts coincide with increased competition from WestJet Airlines Ltd, which is looking to expand both long-haul routes and its its domestic regional flights.
As well, U.S. low-cost carrier Southwest Airlines Co said last month Canada was on a list of attractive destinations it was considering for expansion. ($1 = C$1.0923) (Reporting by Sayantani Ghosh in Bangalore and Susan Taylor in Toronto; Editing by Savio D'Souza)