Global Courant 2023-05-12 21:00:26
Air Canada reported that first-quarter revenue nearly doubled from a year earlier as travelers returned to flights in droves — even as higher costs weighed on net revenue.
Buoyed by record revenues of $4.9 billion, the quarter marked the airline’s second straight profit after 11 consecutive quarters of losses totaling $10.1 billion.
Net profit was $4 million, compared to $974 million in losses a year ago.
Chief executive Michael Rousseau said results for the three months ended March 31 beat all expectations, and he believes demand will continue amid strong pre-bookings for the rest of the year.
“Winter and early spring can be very challenging in North America, especially in Canada. Aside from the weather disturbances that can affect all aspects of the air transportation system, it is usually accompanied by high levels of traffic, especially with a peak during spring break . ,” Rousseau told analysts on a conference call on Friday.
“The strong and improving collaboration between our people and our ecosystem partners has been key to our service delivery over this period and sets our outlook for continued strong performance throughout the summer.”
Return to stability
Despite an uncertain economic outlook, Air Canada’s continued gains over the past six months signal a return to stability for an industry devastated by COVID-19, which brought lockdowns, border closures and travel restrictions.
Air Canada Vacations, the airline’s flight package arm, delivered “remarkable results,” the CEO said. And the cargo company added five more cargo ships to the one it operated a year ago.
Chief financial officer Amos Kazzaz, who was due to step down June 30, noted that “the cost world is different” than it was before 2020, with everything from airline food to ground handlers carrying a higher price tag.
Meanwhile, thanks to higher rates, interest expense on Air Canada’s $6.5 billion net debt rose 17 percent year over year to $245 million, even as the airline cut that debt by half a billion dollars.
However, lower-than-expected jet fuel prices last week helped Air Canada raise its financial forecast for the year. The Montreal-based company raised its adjusted earnings estimates from $2.5 billion to $3 billion from $3.5 billion to $4 billion.
Per diluted share, Air Canada reported a loss of three cents due to an adjustment related to the assumed convertible bond conversion compared to a loss of $2.72 per diluted share in the same quarter last year.
The airline reported revenue of $4.9 billion in the last quarter, up from $2.6 billion in the first three months of 2022.
On an adjusted basis, Air Canada said it lost 53 cents per diluted share last quarter, compared to an adjusted loss of $2.09 per diluted share a year earlier.
The average analyst estimate was an adjusted loss of 74 cents per share and $4.35 billion in revenue, according to estimates from financial markets data company Refinitiv.
