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Published 16:57 IST, May 2nd 2024

Air Canada's Q1 losses overshoot market projections amid rising costs

Rising operational expenses, which climbed by 6% to C$5.22 billion ($3.80 billion), were driven by expanded capacity and flight operations.

Reported by: Business Desk
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Air Canada reports loss | Image: Reuters
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Airline expenses soar: Air Canada's first-quarter performance fell short of market projections as the airline grappled with soaring expenses. Despite a resurgence in business travel, the company faced increased operating costs due to labour and aircraft maintenance, overshadowing any gains.

Rising operational expenses, which climbed by 6 per cent to C$5.22 billion ($3.80 billion), were driven by expanded capacity and flight operations. Additionally, Air Canada, like many carriers, encountered significant costs associated with the maintenance and operation of older, less fuel-efficient aircraft, stemming from production challenges faced by aircraft manufacturers.

Corporate travel boost

While the airline did benefit from a notable uptick in corporate spending on travel, CEO Michael Rousseau emphasised a positive outlook for the upcoming summer months, highlighting a sustained demand for air travel.

Air Canada reaffirmed its core profit forecast for 2024, anticipating adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) to range between C$3.7 billion and C$4.2 billion.

Despite reporting a first-quarter adjusted loss of C$0.27 per share, which exceeded analysts' expectations of a C$0.07 loss, the airline saw a 7 per cent increase in quarterly operating revenue, reaching C$5.23 billion, surpassing Wall Street estimates.

(With Reuters Inputs)

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16:57 IST, May 2nd 2024