Air Canada sees no sign that fears of a potential recession, rising cost of living or problems at airports have dampened traveler appetites.
Posted at 6:44.
Updated at 10:25.
This observation was made by the company’s management on Tuesday during the publication of the results of the second quarter. The Montreal-based carrier also recorded a reduction in net losses thanks to a recovery in demand.
“Demand was strong in June and continued through the third quarter,” said Lucie Guillemette, head of commercial, during a conference call with financial analysts. At present, we do not see any effect associated with forecasts of a possible slowdown in economic growth. »
In a sign of the strength of expected demand, liability for tickets sold in advance, i.e. tickets sold in anticipation of a trip that has not yet taken place, has exceeded pre-pandemic levels. At $4.6 billion as of June 30, this commitment is 24% higher than in the second quarter of 2019 (pre-pandemic).
“That suggests high traffic this summer and possibly this winter,” said Scotiabank analyst Konark Gupta.
Ms. Guillemette mentioned that the pace of recovery accelerated in June. She mentions that revenue increased by 15% from April to May, and from May to June – by 25-30%.
Apologies for “temporary” problems
However, the rapid resumption of air travel caught the global airline by surprise as travelers faced long lines, delays and even flight cancellations.
However, the situation has been particularly challenging in Canada, emphasizes President and CEO Michael Russo. “We have gone from a virtual shutdown of air services that lasted two years to the restoration of capacity to almost 80% of the 2019 thresholds in just a few months. »
During a conference call, management apologized for the inconvenience experienced by travelers and staff. Air Canada believes this is a temporary situation. “We have never seen such strong growth in demand in such a short period of time,” said COO Craig Landry.
To give an idea of the extent of the recovery, Mr. Landry pointed out that the company operated 20,603 flights and carried 1.2 million customers in the second quarter of the previous year. A year later, Air Canada had 84,643 flights for 9.1 million passengers. “This is a fourfold increase in the number of flights and an almost eightfold increase in the number of passengers. »
In the second quarter, Air Canada posted a net loss of $386 million compared to a net loss of $1.165 billion in the same period last year. Diluted net loss per share reached $1.60 compared to a loss of $3.31 in the same period last year.
Revenues, for their part, increased fivefold to $3.98 billion.
Analysts had expected a net loss of 83 cents per share before the earnings release, according to Refinitiv.
Shares of Air Canada lost 1 cent, or 0.06%, to $17.38 on the Toronto Stock Exchange this morning.