Air Canada’s third quarter 2023 results generated operating revenues of $6.3 billion, an increase of 19% over 2022.
The carrier beat estimates, reporting a profit (net income) of $1.25 billion in its latest quarter compared with a loss of $508 million in the same quarter last year, driven by higher passenger revenues. Operated capacity increased 10% from the third quarter of 2022.
According to Michael Rousseau, President and Chief Executive Officer, “Our focus on growing our international network, building scale at our hubs and leveraging our solid partnerships is delivering strong results. Our operating income reached $1.4 billion, more than double from a year ago.”
Overall, a rush by North American travellers to make up for lost time during the pandemic bolstered earnings for legacy carriers, with international destinations enjoying especially high demand.
Fly in the Ointment
But North American carriers such as Air Canada continue to face pressure from higher labour costs, as U.S. pilots nab steep pay increases in new contracts or tentative agreements.
Air Canada pilots anticipate sitting down for labor talks with the carrier in the next couple of weeks, a union official said. Their contract expires at the end of September.
On Growth, Geopolitics, Fuel Pricing
Rousseau is bullish about the future, despite global challenges: "Viewed sequentially, Air Canada's progressive performance to date proves the success of its strategy to grow back the airline and improve operational stability, while mitigating risks. This requires navigating geopolitical uncertainty, inflation and the volatile fuel price environment, meeting increased competition and dealing with supply chain, and the evolving regulatory environment.
“Yet our demonstrated adaptability, combined with a stable demand environment, give us every confidence for the rest of the year and into 2024 despite the inevitable headwinds to which our global industry is prone. We will continue to manage our business with diligence. We remain confident with our full year adjusted EBITDA guidance and at this point in time, expect to land in the higher range of our full year guidance."
