On Friday, Air Canada reported a strong profit for the second quarter of 2023, with revenues also much higher than in 2022.
The carrier has reported an operating income of $802m, which is a significant turnaround from the $253m loss made in the second-quarter of last year.
Revenues have jumped up by 36% to $5.427bn. Looking ahead to the third quarter, based on ASM capacity, the carrier expects to take this even higher:
| Metric | Full Year 2023 | |
| Prior 2023 Guidance (Provided on May 12, 2023) | Updated 2023 Guidance (Provided on August 11, 2023) | |
| ASM capacity | About 23 per cent increase versus 2022 | About 21 per cent increase versus 2022 |
| Adjusted CASM | About 0.5 to 2.5 per cent below 2022 levels | About 0.5 to 1.5 per cent above 2022 levels |
| Adjusted EBITDA | About $3.5 – $4.0 billion | About $3.75 – $4.0 billion |
Air Canada CEO Thanks Staff For Their Hard Work…
Commenting on the very strong results was Michael Rousseau, the Air Canada CEO & President, who gave thanks to staff for their hard work:
“Air Canada’s second quarter results were driven by strong demand and show the effectiveness of our plan.”
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“As a result of the hard work of our people, the appeal of our growing global network, as well as our leading brand and product offering, operating revenues in the quarter reached $5.4 billion, an increase of 36 per cent from a year ago.”
“Operating income was $802 million, a year-over-year improvement of over $1 billion, and our adjusted EBITDA reached $1.2 billion with an adjusted EBITDA margin of 22.5 per cent”.
“I thank the entire team for its continued dedication to serving our customers, including collaborating with our partners, who also share the responsibility of ensuring a smooth customer journey.”
“We safely carried over 11 million customers across our global network in the quarter, a year-over-year increase of about 23 per cent.”
Rousseau: More Work to Do…
Rousseau continued that more work is needed, despite the very strong numbers in the second-quarter for Air Canada.
“However, despite having more trained resources than last summer and improved tools, our operations in June and July were not at expected levels.”
“We are increasing our efforts to protect the customer journey from disruption, regardless of the cause.”
“This includes using any influence we have, in such instances as pilot attrition at our principal regional partner or global supply chain issues, or working to mitigate the effects of situations beyond our control, such as disruptive storm activity in our key hubs and markets.”
“We are confident that our efforts will generate positive outcomes.”
“We are particularly pleased with our international performance, propelling nearly 70 per cent of the year-over-year increase in passenger revenues.”
“Air Canada Vacations continued to see high demand for leisure travel packages, and Aeroplan added compelling new partners and grew its membership.”
“Our cargo business, like others in the industry, experienced lower demand and yields than expected.”
“Based on current passenger booking patterns, we see prevailing strength in travel demand over the second half of 2023, giving us confidence to increase the lower end of our adjusted EBITDA guidance range.”
“We continue to focus intently on cost discipline and liquidity management. We ended the quarter with more than $9.6 billion in cash, cash equivalents and investments.”
“This will enable us to further invest in our business, deleverage our balance sheet and ensure our company maintains the resiliency and adaptability needed for long-term success and to navigate through evolving market conditions”.
Overall…
What remains clear is that despite the very strong results and turnaround from Air Canada, CEO Rousseau is still not done yet.
All eyes will be on him to see how the rest of the Summer season will perform, as well as what the Winter 2023/24 arena will hold for him too.
But for now, let’s see how the carrier performs for the rest of the year.
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