An Air Canada plane taxis at Toronto's Pearson International Airport on May 16.CARLOS OSORIO/Reuters
Air Canada AC-T more than doubled its seat sales in a chaotic summer as a rebound in travel allowed Canada’s largest airline to narrow its losses.
For the three months ending on Sept. 30, Air Canada lost $508-million, or $1.42 a share, compared with a loss of $640-million ($1.79) in the same period of 2021, Air Canada said on Friday.
Revenue for the period totalled $5.3-billion, up from $2.1-billion in the third quarter of 2021 and nearly matching the $5.5-billion mark set in the same period in 2019, before the pandemic grounded much of the world’s airlines and sent the industry into crisis.
Michael Rousseau, chief executive officer of Air Canada, said on a conference with analysts on Friday he was “very pleased” with the financial results. “They mark an import step in our recovery,” he said, pointing to the quarter’s $644-million operating income and 12.1-per-cent operating margin, the first positive numbers since the pandemic began.
Air Canada is emerging from the pandemic “stronger, more resilient and adaptable,” he said. “COVID has been one of the industry’s greatest challenges in both severity and duration.”
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In a statement accompanying the earnings release, Air Canada said it flew about 11.5 million passengers in the third quarter, and expects strong demand to persist.
“Air Canada’s solid third-quarter results stem from the ongoing restoration of our extensive network, an improved operational performance, our modern and efficient fleet, as well as leading products and services and an incredible team of employees,” Mr. Rousseau said in a press release.
As travellers returned to flying in the summer, Canada’s major airports were overwhelmed and understaffed. Passengers faced long lines, holds on planes and lengthy delays retrieving their baggage. The companies and government agencies that operate at the airports blamed a shortage of workers and COVID-19 protocols.
“Thanks to the hard work and commitment of our employees, after a difficult June and July, we saw significant operational improvement throughout August and September, with the operation today now on par with prepandemic levels,” Mr. Rousseau said. “Still, we know many customers experienced disruptions travelling this summer, and we sincerely regret any inconveniences that have occurred.”
Investors reacted to the financial results by driving up Air Canada’s share price on the Toronto Stock Exchange by 4 per cent to $20. The share price has fallen by 9 per cent this year.
In the summer of 2019, before the pandemic, Air Canada made a profit of $636-million ($2.25 a share).
In third-quarter financial results released on Friday before markets opened, Air Canada said its operating capacity more than doubled from the same period of 2021. It flew at 79-per-cent of prepandemic seat capacity. Passenger revenue of $4.8-billion tripled from the third quarter of 2021, and operating revenue increased by 2.5 times.
For the fourth quarter of 2022, Air Canada said it will fly about 85 per cent of its prepandemic capacity.
Walter Spracklin, a Royal Bank of Canada stock analyst, said the results beat his expectations. Higher ticket prices offset fuel expenses, and fuller planes helped reduced per-seat costs, Mr. Spracklin said in a note to clients. “Overall, the quarter was above consensus and our estimates, indicating demand for travel was exceptionally strong,” he said.