Air Canada profits soar as travel demand stays high
Air Canada reported soaring profits in its latest quarter as consumers continued to spend big on travel, despite higher inflation and interest rates weighing on their wallets. The country’s biggest airline saw net income in its Q3 jump to $1.25b from a half-billion-dollar loss in the same period a year earlier. On a conference call Monday, CE Michael Rousseau told analysts demand remains “very stable” — an adjective executives deployed seven times during the call. Bookings back up the CEO’s confidence. Advance ticket sales in the quarter ended Sept. 30 shot up by 55% from the same period a year earlier to $4.5b. Passenger revenues leaped 22% year over year, Rousseau said. Adjusted earnings also surpassed those from 2019, the last year before the COVID-19 pandemic wreaked havoc on the travel industry. The resurgent appetite for travel extends a trend that began in the summer of 2022 and held steady throughout 2023. Despite still-elevated inflation and the Bank of Canada’s key interest rate sitting at 4.5% at the end of January — it’s since crept up to 5% — Canadians took more than 10m trips abroad between January and April. The figure marks a 7% increase from the same four months in 2019, according to an RBC report, which diagnosed “Canadians’ post-pandemic travel fever.” Not all observers were so bullish on demand — including RBC’s own. “We are cautious on consumer spending patterns going into 2024 on the back of lower discretionary income due to higher interest rates, increased competition and higher costs — fuel and labour,” RBC Capital Markets analyst Walter Spracklin said in a note to investors Monday.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-10-31/star/air-canada-profits-soar-as-travel-demand-stays-high
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Air Canada profits soar as travel demand stays high
Air Canada reported soaring profits in its latest quarter as consumers continued to spend big on travel, despite higher inflation and interest rates weighing on their wallets. The country’s biggest airline saw net income in its Q3 jump to $1.25b from a half-billion-dollar loss in the same period a year earlier. On a conference call Monday, CE Michael Rousseau told analysts demand remains “very stable” — an adjective executives deployed seven times during the call. Bookings back up the CEO’s confidence. Advance ticket sales in the quarter ended Sept. 30 shot up by 55% from the same period a year earlier to $4.5b. Passenger revenues leaped 22% year over year, Rousseau said. Adjusted earnings also surpassed those from 2019, the last year before the COVID-19 pandemic wreaked havoc on the travel industry. The resurgent appetite for travel extends a trend that began in the summer of 2022 and held steady throughout 2023. Despite still-elevated inflation and the Bank of Canada’s key interest rate sitting at 4.5% at the end of January — it’s since crept up to 5% — Canadians took more than 10m trips abroad between January and April. The figure marks a 7% increase from the same four months in 2019, according to an RBC report, which diagnosed “Canadians’ post-pandemic travel fever.” Not all observers were so bullish on demand — including RBC’s own. “We are cautious on consumer spending patterns going into 2024 on the back of lower discretionary income due to higher interest rates, increased competition and higher costs — fuel and labour,” RBC Capital Markets analyst Walter Spracklin said in a note to investors Monday.<br/>
