Air Canada posted quarterly earnings that soared to pre-pandemic levels amid high travel demand and pricier fares, and despite tens of thousands of flight delays.
The country's largest airline roared back to profitability after nearly $1 billion in losses for all of 2022. It posted net income of $838 million in the quarter ended June 30 compared with a loss of $386 million in the same period a year earlier.
Strong demand propelled more than 11 million customers across its network in the quarter, said CEO Michael Rousseau. Analysts also noted higher ticket prices behind the thicker profit margins.
The sturdy earnings came despite consistent delays across its network over the past two and a half months, with half of the carrier's flights routinely arriving late or cancelled outright.
Even with more staff and revamped technology, Air Canada's operations in June and July failed to meet "expected levels," Rousseau said. The company ranked last among North America's 10 biggest airlines for on-time performance in July in a report by aviation data firm Cirium this week.
Rousseau pointed to "severe weather" — storms, especially — and "global supply chain issues" over the summer.
He also acknowledged problems on its large network of regional flights, run by Jazz Aviation. The CEO cited a pilot shortage amid new competitors — Flair Airlines and Lynx Air are two — stricter rules around rest and shift length as well as pilot schools that saw enrolment shrink to a trickle during the COVID-19 pandemic.
"We have this almost perfect storm that exists at this point in time," Rousseau said. "We're working hard with our partner, Jazz, on solving that problem right now … but it will take some time to transition."
On Friday, Air Canada reported operating revenues in its second quarter climbed to $5.43 billion from $3.98 billion the year before.
On an adjusted basis, diluted earnings hit $1.85 per share versus a loss of $1.12 per share a year prior, the Montreal-based company said. The latest figure towered over analyst expectations of 68 cents per share, according to financial markets data firm Refinitiv.
"Air Canada had a very strong quarter benefiting from strong customer demand, full planes, high ticket prices and low fuel costs," said RBC Dominion Securities analyst Walter Spracklin in a note to investors.
This report by The Canadian Press was first published Aug. 11, 2023.
Companies in this story: (TSX:AC, TSX:CHR)
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2023-08-11 13:08:51Z
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