Air Canada reported a loss of CAD $81 million in its first quarter, even though operating revenue was up 7% from a year ago.
The quarterly loss compares with a profit of $4 million in the same quarter last year.
Canada’s largest airline reported operating revenue of $5.23 billion for the quarter, up from $4.89 billion in its first quarter of 2023. But operating expenses rose six per cent to $5.215 billion for quarter one, partly due to higher expenses from expanded seat capacity. Labour costs and prices for maintenance and information technology also hurt the bottom line.
"Air Canada's solid first quarter results position our airline for a strong performance in 2024,” said Michael Rousseau, President and Chief Executive Officer of Air Canada. “We had operating revenues of $5.2 billion in the quarter, up $339 million from last year.”
“Our first quarter results were solid and largely in line with our internal expectations,” Rousseau said on a conference call with analysts on 02MAY.
However, Royal Bank of Canada analyst James McGarragle said Air Canada’s results missed expectations, the Globe and Mail reports. In a note to clients, he said that margins for the quarter were 8.7 per cent; lower than the 9.9 per cent analysts had expected.
Meanwhile, Bank of Montreal analyst Fadi Chamoun said sales in most regions were better than he expected, with the exception of the Atlantic. Advance ticket sales point to a strong summer, and The Globe quoted Chamoun as saying Air Canada’s results were “largely in line” with expectations.
“I thank our employees for their hard work taking care of our 11 million customers and transporting them safely throughout the quarter,” Rousseau said. “I also commend them for improving our operations, notably a 13 percentage-point increase in system-wide, on-time arrivals, preparing us for an anticipated busy summer period.”
Lisa Pierce, Vice President Global Sales and Air Canada Vacations, told Open Jaw, “We thank our travel agency partners for their contributions to our solid first quarter results. Our teams and our valued partners really do mean the world to us."
Rousseau said he’s confident in AC’s ability to deliver on its full year 2024 plan.
“As we look toward the summer, we see a continued healthy demand environment, and our customers will have a wide range of exciting travel options across Europe, Asia, and North America, for their summer holiday planning.”
Air Canada said it plans to increase its capacity, measured as available seat miles, by seven per cent in the second quarter of this year, compared to last year’s quarter two. The airline also said it’s in the process of arranging lease agreements for added Boeing 737 MAX 8 aircraft that would be scheduled for delivery in 2024 and enter service in 2025.
