Air Canada amplified the consensus view among major North American airlines that border reopenings have created a strong demand environment, driving a robust recovery from the COVID-19 crisis that is likely to accelerate in coming months.
Air Canada, which reported a C$974 million ($780 million) first-quarter net loss, operated 45% of its 2019 capacity levels in the March quarter. The airline said this capacity level was “generally in line with the capacity expectations projected” in February.
Air Canada, in a management analysis issued by the airline along with its earnings, said it expects “much stronger 2022 second- and third-quarter results.”
In the second quarter, the Star Alliance member will increase capacity to 73% of 2019 June quarter levels. For the full year, Air Canada expects to operate 75% of 2019 capacity.
Montreal (YUL))-based Air Canada noted vaccinated passengers can now fly into Canada with no testing requirement—although some passengers may be pulled aside for random tests.
“Air Canada and the rest of the global airline industry have faced significantly lower traffic than in 2019, and a corresponding decline in revenue and cash flows, as a result of the COVID-19 pandemic and the travel restrictions imposed in many countries around the world, including in Canada,” the airline said in a statement. “Conditions have improved and travel restrictions have been lifted in many countries, but Air Canada cannot predict the timing and extent of the return to pre-pandemic levels.”
Air Canada CEO Michale Rousseau said he “anticipates … recovery will gain momentum through the balance of 2022 and beyond.”
He added: "The year began with weakness brought on by the omicron variant and travel restrictions. However, we quickly rebounded in March with passenger volumes exceeding the strong December levels and passenger ticket sales in March 2022 over 90% of March 2019 levels, a leading indicator to much stronger 2022 second and third quarter results."
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