Air Canada lifts profit forecast on international travel rebound
Reuters
Published Oct 30, 2023 06:15AM ET
Updated Oct 30, 2023 09:56AM ET
(Reuters) -Air Canada expects 2023 core profit towards the higher range of its previous forecast, it said, after beating third-quarter profit estimates on strong international travel demand.
North American airlines operating international flights see sustained demand for long-haul journeys as more people fly abroad, despite higher costs. Canada's largest carrier said on Monday it sees opportunity to redeploy capacity to Asia Pacific over the coming months, boosting travel to Japan and Korea.
But airlines are facing pressure from higher labor costs, with pilots at U.S. legacy carriers nabbing steep pay rises in new contracts.
On Monday, Air Canada pilots picketed in Montreal, demanding to close a gap in pay with higher-paid U.S. counterparts at carriers like United Airlines.
Air Canada Chief Executive Michael Rousseau declined to discuss the talks, but told analysts that a 2023 deal reached by smaller rival WestJet Airlines was in "our range of expectations" on the market for pilot compensation.
Charlene Hudy, who heads the local union representing Air Canada pilots, said members were encouraged by its results.
"Yet we are the lowest paid pilots compared to our counterparts," said Hudy of the union which is represented by the Air Line Pilots Association (ALPA).
Air Canada raised its full-year guidance for cost per available seat mile (CASM) to about 1.5% to 2.25% above 2022 levels, compared with the earlier 0.5% to 1.5% range.
The airline posted adjusted profit of C$3.41 per share for the quarter ended Sept. 30, compared with analysts' average estimate of C$2.15 per share, according to LSEG data.
It now expects its 2023 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) toward the higher end of its previous forecast range of about C$3.75 billion to C$4.0 billion.
Air Canada's quarterly operating revenue rose 19.2% to C$6.34 billion, beating analysts' average expectations of C$6.10 billion. Air Canada shares were up 0.86% in morning trade.
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Written By: Reuters
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