Despite record operating revenues for 2023 and continued post-pandemic travel demand, Air Canada is taking a cautious approach to 2024.
Canada’s largest airline says it will boost capacity this year by six to eight percent. It’s a healthy growth rate, but Canadian Press reports it’s below analysts' expectations of a 10% increase.
"This is reasonable for us as we continue to see industry supply chain pressures and other constraining factors," Air Canada Vice President of Network Planning Mark Galardo said on a conference call with analysts on 16FEB. Those pressures may include production delays at Boeing and Airbus, with at least one Air Canada plane delivery this year pushed back to 2025.
“The carrier's brake tapping means it won't exceed 2019 capacity levels until 2025, five years after the COVID-19 pandemic first hammered the travel industry,” Canadian Press stated.
Air Canada last week reported record operating revenues of $21.8 billion for 2023, up 32% from 2022. Operating income was $2.3 billion, a $2.5 billion improvement from 2022.
”The easing of capacity targets suggests that the "rapid expansion in leisure routes may be scaling back," RBC Capital Markets analyst Walter Spracklin told CP.
Air Canada’s cautious approach stands "in contrast" to plans by other large North American airlines, said Savanthi Syth of Raymond James.
