Air Canada reported a smaller-than-expected quarterly loss on Friday, as Canada’s largest airline benefited from resilient travel demand. Major airlines are enjoying the strongest travel demand since the beginning of the COVID-19 pandemic, despite rising airfares and squeezed budgets amid high inflation.Canada, which lifted all Covid-related restrictions last year, has seen a strong rebound in international leisure and corporate travel.
“Our first quarter financial results exceeded both internal and external expectations and we expect demand to persist, supported by strong advance bookings for the remainder of the year,” Air Canada CEO Michael Rousseau said in a statement.
The Montreal-based airline said it plans to increase its capacity for the current quarter by 22 per cent from a year earlier. North American carriers remain bullish on filling airplane seats due to limited capacity and a shift in consumer spending from goods to services.
The move comes as easing restrictions spurred leisure and international travel demand, helping carriers to mitigate cost pressures even as rising inflation is making leisure activities more expensive. In February, Air Canada Chief Executive said travel demand for leisure and visiting friends and relatives is making up for lower demand by business travellers.
Air Canada reported an adjusted loss of CD 0.53 per share for its first quarter ended March 31, compared with analysts’ average estimate of CD 0.74 loss per share. Operating revenue more than doubled from a year earlier to CD 4.89 billion ($3.66 billion), beating Wall Street expectations of CD 4.35 billion. Earlier this month, the airline had raised its forecast for full-year core profit, citing lower-than-anticipated fuel costs and stronger-than-expected demand.
