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Not just Americans are going abroad this summer, so do Canadians. Air Canada reported revenue growth for Q2 of 36 percent compared to last year, of which seventy percent has come from the international network. Air Canada Vacations saw high demand for leisure travel packages, the airline said on August 11. International travel drives Air Canada’s Q2 revenues.

Operating revenues for Q2 grew to CS$5.427 billion from CS$3.981 billion in the same quarter last year. Passenger revenues contributed CS$4.901 billion to this as Air Canada and its subsidiary Rouge carried 11.3 million passengers at an 87.9 percent load factor versus 9.1 million and 80.5 percent last year. Revenues per available seat mile (RASM) were CS$19.9 cents, up three cents.

Strong demand on the Atlantic

Demand was particularly strong on the Atlantic, where revenues grew 58.4 percent to CS$1.665 billion. As the Pacific reopened and Air Canada resumed services, revenues grew by 154 percent to CS$573 million. US transborder revenues grew by 36.3 percent to CS$1.037 billion and Canada domestic by 14.9 percent to CS$1.282 billion.

In the Management Discussion, Air Canada says: “The strength in demand for passenger air transportation through the second quarter of 2023, combined with capacity constraints in the global commercial airlines sector, have favored the pricing environment across all markets where Air Canada operates. These results stemmed from strength in point-to-point demand (travelers with no connections), demand for premium products (both from business and leisure customers) and customers connecting through our hubs, including in sixth freedom traffic, as well as benefits delivered by partnerships and by the Aeroplan program.”


Air Canada Cargo’s results were less positive. Q2 revenues were down to CS$227 million from CS$299 million and to CS$465 million from CS$697 million in HY1. The airline operated six converted Boeing 767s.

“The year-over-year decline reflects the impact of temporarily converted passenger aircraft having been returned to passenger operations through the end of the second quarter of 2022. The decline was partially offset by increased freighter operations to Central and South America and to Europe.”

Total operating expenses were up nine percent to CS$4.625 billion, attributed to higher costs for all line items that were partially offset by 31.4 percent lower fuel costs to CS$1.187 billion. The operating profit was CS$802 million compared to CS$-253 million last year, resulting in an operating margin of 14.8 percent versus -6.4 percent in 2022. Adjusted EBITDA was CS$ 1.220 billion, up from just CS$154 million. The net profit was CS$838 million, up from CS$-386 million. Net cash flow was CS$1.490 billion.

In HY1, Air Canada generated operating revenues of CS$10.314 billion, up from CS$6.554 billion. The number of passengers carried was 21.3 million (2022: 14.6 million) at an 86.4 percent load factor (74.7 percent). Operating expenses totaled CS$9.529 billion, up from CS$7.357 billion as fuel was more expensive in the first quarter.

The operating profit was a positive CS$785 million compared to CS$-803 million in HY1 2022. The net profit stands at CS$842 million, turning around a CS$-1.360 billion net loss. The operating margin was 7.6 percent. Adjusted EBITDA improved significantly from CS$11 million last year to CS$1.631 billion in the first six months. Liquidity stands at CS$10.551 billion in cash and cash equivalents. Net debt was reduced by CS$2.1 billion to CS$5.330 billion.

Full-year capacity projections slightly down

Air Canada plans to grow Q3 capacity by eleven percent year on year but has revised its full-year capacity guidance to plus 21 from plus 23 percent in April. Guidance for the Adjusted EBITDA is slightly more positive to CS$3.75 to CS$4.0 billion, up from a lower range of CS$3.5 billion, based on expected earnings from strong demand.

CEO Michael Rousseau says in the earnings release: “Based on current passenger booking patterns, we see prevailing strength in travel demand over the second half of 2023, giving us confidence to increase the lower end of our adjusted EBITDA guidance range. We continue to focus intently on cost discipline and liquidity management. We ended the quarter with more than $9.6 billion in cash, cash equivalents and investments. This will enable us to further invest in our business, deleverage our balance sheet and ensure our company maintains the resiliency and adaptability needed for long-term success and to navigate through evolving market conditions.”


The parent airline grew the fleet to 200 aircraft by June 30, thanks to the addition of one new Airbus A220 and Boeing 787-9 but also from temporary inducting two A319ceo’s that will exit again before the end of the year. The same will happen to two A320ceo’s. One 777-300ER and two A330-300s rejoined the active fleet, while Air Canada Cargo received its sixth 767-300BCF and will get a seventh before January.

New deliveries through 2024 include three A220-300s, one 787-9, and two 777Fs. Deliveries of 27  Airbus A220s continue through 2026, although the airline has purchase options for another fifteen. From 2025, Air Canada expects the first of 28 Airbus A321XLRs, with deliveries continuing through 2028. Eighteen aircraft will be leased, ten are on direct order with Airbus. The carrier also still has ten purchase options on ten Boeing MAX.

Air Canada Rouge grew the fleet by a net one aircraft to forty as it added three A321s and exited two A319s. Air Canada Express operated 114 aircraft, unchanged from December. Express will induct four De Havilland Canada Dash 8-400s next year while eight Mitsubishi CRJ200s will leave the fleet.

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Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News and until July 1 2023 in a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.

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