Air Canada revenue more than doubles on strong travel demand
Reuters
Published Oct 28, 2022 07:39AM ET
Updated Oct 28, 2022 10:55AM ET
(Reuters) - Air Canada said on Friday its quarterly revenue more than doubled as it flew more people, helped by strong summer travel demand, but the carrier warned it faces challenges from high jet-fuel prices.
Canada, which eased all COVID restrictions for travelers at the beginning of this month, has seen a strong rebound in travel as most countries have dropped such restrictions.
"Travel is back with a strong momentum," said Lucie Guillemette, Air Canada's chief commercial officer told analysts.
Air Canada shares rose 3.94% in morning trade.
Third-quarter passenger revenue on Atlantic travel exceeded those during the same period in 2019 by 10%, Guillemette said, in upbeat remarks which echoed recent comments from airlines in the United States.
U.S. carriers such as United Airlines Holdings (NASDAQ:UAL), which reported earnings earlier this month, have said they are enjoying the strongest consumer demand in three years.
Canada's largest carrier also reported an operating margin of 12.1%, the first quarter since the pandemic began where it delivered positive operating income. It said it expects no softening on yields as it looks ahead to the winter holiday travel period.
But the surge in demand, coupled with staffing shortfalls at airports, had left travelers wrestling this summer with long lines and delayed flights, while costs remain a challenge for North American carriers.
Air Canada said unfavorable foreign exchange movements contributed to an increase in fuel expenses but it is addressing the rise through pricing.
The company posted revenue of C$5.32 billion in the third quarter, compared with C$2.10 billion during the same period a year earlier. Its net loss narrowed to C$508 million from C$640 million.
Quarterly operating expenses of C$4.678 billion increased by C$2.211 billion, however cost per available seat mile (CASM) fell to 18.3 Canadian cents from the third quarter 2021 figure of 22.2 Canadian cents.
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Written By: Reuters
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