That compared to net income of $89 million in the fourth quarter of 2010, which included foreign exchange gains of $136 million and an impairment charge on aircraft of $49 million.
The airline's adjusted net loss per diluted share in the quarter was 64 cents compared to an adjusted net loss of 17 cents in the same quarter the year before.
Air Canada's revenues were up slightly in the quarter, to $ 2.7 billion, from $2.6 billion in the same quarter a year earlier.
The airline was expected to lose 50 cents per share on an adjusted basis on $2.7 billion of revenues in the fourth quarter, according to analysts polled by Thomson Reuters.
That compared to a 27 cents per share profit a year earlier on $2.6 billion of revenues.
For the full year, the airline lost 72 cents per adjusted share on $11.6 billion in revenue.
Air Canada was forecast to lose 65 cents per share on $11.6 billion of revenues, compared to a 15-cent profit on $10.8 billion of revenues in 2010.
The Montreal-based carrier's shares have recovered some of the ground lost last year as it grappled with labour disruptions of flight attendants.
Shares have increased to $1.39 from the low of 95 cents set last month, but that's down 60 per cent from the 52-week high of $3.50.
Several analysts recently upgraded the company to outperform on the back of growing positive signs, particularly in the U.S.
"While risks still remain longer term, the near term risks are mitigated by the $2.2 billion in cash on the balance sheet," noted Walter Spracklin of RBC Capital Markets.
The airline faces the threat of a potential work stoppage by its pilots and uncertainty over its plans to start a low-cost carrier.
The city of Montreal has urged the carrier to reverse a decision to relocate 140 jobs to Toronto from the carrier's base in Montreal.
The jobs involve scheduling pilots and flight attendants.
The airline has said moving the functions to its new operational control centre in Toronto during the next two years will improve customer service because it will be easier and more efficient to have the people in one place.
There are now about 250 people at the facility in Toronto, where Air Canada has its main national and international hub.
The airline is Canada's largest domestic and international full-service airline providing scheduled and charter air transportation for passengers and cargo to more than 175 destinations on five continents.
It is the world's 15th largest commercial airline, providing service to more than 32 million passengers a year.
