Air Canada says it earned a profit of $838 million in its most recent quarter amid booming demand for travel and higher fares — despite thousands of flight delays.
The Montreal-based carrier posted quarterly numbers on Friday morning that showed the company’s financial results are soaring to levels not seen since before the pandemic.
Operating revenues in the three-month period up until the end of June touched $5.43 billion, up from $3.98 billion in the same period a year ago.
Net income came in at $838 million in the quarter, a reversal from the loss of $386 million in the same period a year earlier. Earnings per diluted share came in at $1.85. That’s the highest figure for that number since the middle of 2019.
Analysts also noted higher ticket prices behind the thicker profit margins. “Air Canada had a very strong quarter benefiting from strong customer demand, full planes, high ticket prices and low fuel costs,” said RBC Dominion Securities analyst Walter Spracklin in a note to investors.
CEO Michael Rousseau credited the company’s strong quarterly performance to booming demand for travel, especially international destinations. More than two thirds of the year-over-year increase in revenue came from international travel, Rousseau said, adding that the airline “safely carried over 11 million customers across our global network in the quarter, a year-over-year increase of about 23 per cent.”
Poor on-time performance
Despite the strong financial performance, Rousseau says the company knows it needs to improve.
The company’s flight communicator system broke down one day in May and then again in June, each time causing delays to ripple across the network and stranding or inconveniencing thousands of passengers.
After initially rejecting thousands of passenger claims for compensation related to the outages, the airline eventually started offering compensation to people whose claims had previously been denied.
“Despite having more trained resources than last summer and improved tools, our operations in June and July were not at expected levels,” Rousseau said. “We are increasing our efforts to protect the customer journey from disruption, regardless of the cause.”
Separate from the company’s earnings on Friday, a report this week by market research firm Cirium showed the company didn’t leave its delay problems behind it in June. Cirium ranked Air Canada in last place among the 10 biggest airlines in North America for on-time performance in July. Less than 52 per cent of the airline’s flights during the month were on time.
Westjet was in seventh place, with almost 62 per cent. The leaders were Alaska Airlines and Delta, which came in at 82 and 78 per cent, respectively.
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Air Canada spokesman Peter Fitzpatrick told the Canadian Press that 140,000 passengers per day flew on Air Canada’s 36,000 trips last month.
“As with any system, when it is operating at full capacity it may slow processes down and take longer to recover when issues arise. That said, many of the delays were relatively short,” he said.
Data from tracking service FlightAware.com shows that on Thursday, 19 Air Canada flights were cancelled across its network, while 254 were delayed. Those represent three and 44 per cent of the airline’s entire service, respectively.
The day before, Air Canada saw 533 delays or cancellations out of roughly 1,250 flights.