Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Air Canada raises annual cost forecast, misses earnings

Stock Markets Aug 02, 2022 10:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: An Air Canada plane taxis at Pearson International Airport in Toronto, Ontario, Canada May 16, 2022. REUTERS/Carlos Osorio/File Photo

By Kannaki Deka and Allison Lampert

(Reuters) - Air Canada on Tuesday missed on earnings as costs rise after posting a smaller quarterly loss and forecasting higher full-year expenses, sending shares down 1% in morning trade.

North American carriers are flying more passengers after a pandemic-induced slump, but face rising labor costs and high jet fuel prices, along with staffing shortages and congestion at some airports.

Canada's largest carrier has wrestled with complaints over long lines and lost luggage at some hubs, but executives see improvements in baggage handling and demand for international travel as bright spots.

Air Canada doesn't see any impact from forecasts of a possible economic turndown. Bookings going into the fourth quarter remain strong, with load factors projected to be in line with 2019 levels.

"We're not seeing any evidence of a slowdown," Chief Executive Mike Rousseau told a call with analysts.

Air Canada expects 2022 adjusted cost per available seat mile to be up about 15% to 17%, above 2019 levels, compared with a previous forecast of 13% to 15% higher.

U.S. carriers are also struggling to offset higher costs by raising fares.

Air Canada Chief Commercial Officer Lucie Guillemette said the carrier sees strength in sixth freedom flying, where it indirectly flies U.S. passengers to international cities such as London following a stop at one of its Canadian hubs.

Guillemette said June represented "a record month for absolute sixth freedom customers in AC's history."

The carrier's sixth freedom traffic on Atlantic routes accounted for 6% of total revenues during the second quarter of 2022, compared with 5% during the quarter in 2019.

Air Canada reported a second-quarter operating loss of C$253 million ($196.87 million), compared with a loss of C$1.13 billion a year earlier. It reported a loss of C$1.60 per diluted share.

Analysts on average were expecting a loss of C$0.91 per share according to estimates by Refinitiv.

Operating revenue in the three-months ending June 30 was C$3.98 billion, compared with C$837 million in the same quarter last year.

($1 = 1.2851 Canadian dollars)

Air Canada raises annual cost forecast, misses earnings
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email