Air Canada Swings To Profit In Q2, Beats Estimates

Air Canada (AC_A.TO), the flag carrier of Canada, on Friday posted a turnaround to profit for the second quarter, amidst higher revenues, supported by an improvement in passenger demand. The company’s earnings and revenue beat the Street View.

Further, the air services provider has revised its full-year outlook.

For the three-month period, the company registered profit of C$838 million or C$2.34 per share, compared with loss of C$386 million or C$1.60 per share, posted for the same period of 2022.

Excluding items, earnings were C$664 million or C$1.85 per share, versus last year’s loss of C$455 million or C$1.12 per share. On average, nine analysts polled by Thomson Reuters had expected the firm to earn C$0.68 per share. Analysts’ estimates typically exclude special items.

Pre-tax income was at C$796 million, compared with a loss of C$352 million in the previous year’s quarter.

Excluding items, EBITDA surged to C$1.220 billion from the previous year’s C$154 million.

Operating profit stood at C$802 million, compared with a loss of C$253 million a year ago.

Revenue passenger miles were at 21.617 billion, versus 16.371 billion in the previous year.

Available seat miles or ASM improved to 24.606 billion from last year’s 20.331 billion.

Excluding items, the cost per available seat mile or CASM rose to 13.3 cents from 13.1 cents in 2022. The passenger load factor was up at 87.9 percent from 80.5 percent in 2022.

Revenue was at C$5.427 billion, up from C$3.981 billion in 2022, above the analysts’ estimate of C$5.14 billion.

Looking ahead, for the third quarter, the airline expects its ASM capacity to post a growth of 11 percent from the previous year.

Citing prevailing travel demand, for the full-year 2023, Air Canada now expects to post Adjusted EBITDA of about C$3.75 billion to C$4 billion against its previous outlook of about C$3.5 billion to C$4 billion.

Excluding items, the company now projects its CASM to register a growth of 0.5 percent to 1.5 percent. Earlier, the company had projected its CASM to register a fall of 0.5 percent to 2.5 percent.

Air Canada now forecasts ASM capacity growth of about 21 percent against its previous growth projection of about 23 percent.

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