Air Canada taps the brakes on ramp-up, even as Canadians still want to fly
Air Canada is proceeding more cautiously ongrowth plans this year, despite sturdy profits and strong bookings last quarter as its post-pandemic recovery continues. The country’s biggest airline aims to boost flight capacity by 6% to 8%, below analysts’ expectations of a 10% increase. “This is reasonable for us as we continue to see industry supply chain pressures and other constraining factors,” said head of network planning Mark Galardo on a conference call with analysts Friday. Those pressures may include production delays at Boeing and Airbus, with at least one Air Canada plane delivery this year pushed back to 2025.The carrier’s brake tapping means it won’t exceed 2019 capacity levels until 2025, five years after the COVID-19 pandemic first hammered thetravel industry. The slowdown also suggests the “rapid expansion in leisure routes may be scaling back,” said RBC Capital Markets analyst Walter Spracklin. And it stands “in contrast” to plans by other large airlines in North America, according to Savanthi Syth of Raymond James. Nonetheless, short-term demand remains steady, with advance bookings up 6% year-over-year in the fourth quarter. Air Canada earned nearly 10% higher year-over-year profits even as it strained to keep a lid on cost increases that have plagued the industry. More flights and higher fares on international trips — particularly over the Atlantic and Pacific oceans — drove a 12 per cent rise in passenger revenues last quarter versus a year earlier, said CEO Michael Rousseau. He called the full year “very successful,” as net income over 12 months swung to a profit of $2.28b from a $1.70b loss in 2022.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-02-21/star/air-canada-taps-the-brakes-on-ramp-up-even-as-canadians-still-want-to-fly
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Air Canada taps the brakes on ramp-up, even as Canadians still want to fly
Air Canada is proceeding more cautiously ongrowth plans this year, despite sturdy profits and strong bookings last quarter as its post-pandemic recovery continues. The country’s biggest airline aims to boost flight capacity by 6% to 8%, below analysts’ expectations of a 10% increase. “This is reasonable for us as we continue to see industry supply chain pressures and other constraining factors,” said head of network planning Mark Galardo on a conference call with analysts Friday. Those pressures may include production delays at Boeing and Airbus, with at least one Air Canada plane delivery this year pushed back to 2025.The carrier’s brake tapping means it won’t exceed 2019 capacity levels until 2025, five years after the COVID-19 pandemic first hammered thetravel industry. The slowdown also suggests the “rapid expansion in leisure routes may be scaling back,” said RBC Capital Markets analyst Walter Spracklin. And it stands “in contrast” to plans by other large airlines in North America, according to Savanthi Syth of Raymond James. Nonetheless, short-term demand remains steady, with advance bookings up 6% year-over-year in the fourth quarter. Air Canada earned nearly 10% higher year-over-year profits even as it strained to keep a lid on cost increases that have plagued the industry. More flights and higher fares on international trips — particularly over the Atlantic and Pacific oceans — drove a 12 per cent rise in passenger revenues last quarter versus a year earlier, said CEO Michael Rousseau. He called the full year “very successful,” as net income over 12 months swung to a profit of $2.28b from a $1.70b loss in 2022.<br/>
