Air Canada: Corp. Recovery Has 'Plateaued'
Air Canada executives during a Friday morning earnings call said that "from a corporate perspective, the recovery has plateaued a little bit." Its noncontracted business, however, has rebounded.
ShanonG
Air Canada didn't discuss its business travel segment much during a Friday morning earnings call, however Mark Galardo, the carrier's EVP of revenue and network planning, noted that "from a corporate perspective, the recovery has plateaued a little bit." Its noncontracted business, however, has rebounded.
"What we're really encouraged to see is the noncontracted business traffic continuing to recover significantly, so that's giving us some further encouragement about our prospects in the business cabin going forward," Galardo said.
The carrier also is seeing significant business-cabin recovery, though it's driven primarily by a combination of leisure travel and Aeroplan loyalty program redemptions, Galardo said. "We got a nice mix going on in 2023 that we didn't have in 2019, and that's bearing fruit in Q1 this year," he said.
NDC, Technology Investments
Citing Air Canada's April announcement about a series of distribution changes to drive customers to New Distribution Capability channels, outgoing CFO Amos Kazzaz said the effort and "new commercial arrangements with industry providers also create cost transformation opportunities."
The carrier during the quarter also announced that Amadeus would offer its NDC content.
Additional investments in digital technologies include "new dynamic boarding passes, biometric facial recognition technology in airports, and [the ability to] pre-order meals through our website and mobile app," said Air Canada president and CEO Michael Rousseau.
Q1 Metrics
Air Canada reported record first-quarter passenger revenue of C$4.1 billion (US$3 billion), representing more than double the passenger revenue from Q1 2022. The carrier also had record first-quarter total revenue of C$4.9 billion, a 90 percent increase year over year and about 10 percent higher than Q1 2019. The net income of C$4 million compares with a net loss of C$974 million a year prior.
First-quarter capacity increased 53 percent from Q1 2022 and is at about 84 percent of Q1 2019 available seat miles. Second-quarter capacity guidance is for about a 23 percent increase versus Q2 2022, approximately 90 percent of Q2 2019 capacity levels.
