Air Canada saw its revenue more than triple in its most recent quarter. (REUTERS/Olivier Jean)
Air Canada’s (AC.TO) revenue more than tripled in the first quarter as itsnet loss improved to nearly $1 billion, a sign the airline’s CEO says is “clear evidence the recovery is underway.”
After a sluggish start to the year marred by the Omicron variant and travel restrictions, travel demand surged in March with bookings hitting 90 per cent of 2019 levels. The boost in demand helped the airline improve its net loss in the three-month period ending March 31 to $974 million, or $2.72 per diluted share, from $1.3 billion, or $3.90 per diluted share, last year.
The loss, however, was larger than what analysts had expected and sent shares down as much as nearly 7 per cent on Tuesday. They were expecting a loss of $1.49 a share, according to estimates from Refinitiv.
The company saw operating revenue in the quarter jump from $729 million to $2.6 billion, as the airline increased capacity and saw travel demand start to return by the end of the quarter.
“Traffic is returning. Revenues are growing. Our networks are being restored and our finances, including our liquidity position, are very strong,” Air Canada CEO Michael Rousseau said on a conference call with analysts on Tuesday morning.
Domestic travel led the way in sales for Air Canada, with revenue from Canadian flights reaching $648 million, a 174 per cent increase from $237 million last year. Sales from transborder flights to the U.S. surged 1,380 per cent, growing from $29 million last year to $425 million.
But business travel demand continues to struggle, with bookings at 50 per cent of 2019 levels. Air Canada’s chief commercial officer Lucie Guillemette says corporate demand recovery will take longer, but that business bookings may be within 70 per cent of 2019 levels by September or October.
While revenue rose in the quarter, the airline also grappled with soaring fuel prices spurred by Russia’s invasion of Ukraine. Fuel expenses jumped from $200 million last year to $750 million as the cost per litre increased from $62.7 to $98.6. The airline expects the price of jet fuel will average $1.24 per litre for the full year.
Increasing fares is one way the airline can mitigate the rising cost of fuel, Guillemette said on Tuesday.
“We continue to do all possible to recover, either through base fares, fuel surcharges or even revisiting some of our ancillary revenues,” she said, noting that the airline needs to manage pricing “wisely” given the current competitive environment in Canada.
“There’s no doubt that maybe for some segments of the market demand may be more challenged with fares, but there’s still opportunities for us to bring in more money here using other levers than just the basic fare increase.”
The growing demand for travel, as well as rising fuel costs, has meant airfares are on the rise in Canada. Statistics Canada data released last week showed that air transportation prices increased 8.3 per cent between February and March, fuelled by strong demand for domestic travel and trips to the U.S.
RBC Capital Markets analyst Walter Spracklin said in a note to clients released on Tuesday that the results were “a solid indication” that the recovery continues for the airline, although he noted that the return of business travel remains a key risk.
“Given that (the first quarter of 2022) remains very much a recovery quarter, we are less concerned about variations to expectations as long as the trajectory is in the right direction — which evidence suggests it is,” Spracklin wrote.
The results come as Air Canada’s traffic numbers continue to rise, hitting levels not seen since before the COVID-19 pandemic hit. The airline flew more than 100,701 customers on April 15, the first time it had carried more than 100,000 passengers on its planes in a single day since March 13, 2020.
Air Canada will boost its full-year seat capacity by 150 per cent compared to 2021 levels, representing 75 per cent of what the airline flew in 2019. The airline says it expects capacity to reach 95 per cent of its 2019 levels by 2024.
With files from Reuters
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
