Air Canada is finally gaining some altitude. The airline reported third quarter 2021 financial results this morning, and the numbers are encouraging.
AC posted operating revenues of $2.103 billion, representing almost three times the revenues of $757 million in same period of 2020. The operating loss was $364 million - still a big number, but less than half the operating loss of $785 million for Q3 2020.
Reflecting one pandemic bright spots, AC enjoyed record revenues for cargo, topping the billion-dollar mark year-to-date.
"We are encouraged by the favourable revenue and traffic trends in the third quarter, with strong increases in key passenger geographic segments, a record cargo performance and significant improvements in both Air Canada Vacations and Aeroplan," said Michael Rousseau, President and Chief Executive Officer.
"The combination of these factors, along with effective cost controls, resulted in net cash flow of $153 million for the quarter, materially better than expected and as compared to the third quarter of 2020."
While travel conditions are gradually improving, there's still a long way to go.
In the third quarter ending September 30, capacity (measured in 'available seat miles' or ASM) was up by 87% over Q3 2020. But it remained down 66% compared with the same period in 2020.
Air Canada plans to increase its fourth quarter 2021 ASM capacity by about 135% from the same quarter in 2020. When compared to 2019, fourth quarter ASM capacity is expected to be down by about 47%. Both Air Canada and financial analysts were hoping for a better number of 41-42%.
"Air Canada will continue to adjust capacity and take other measures as required, including so as to account for passenger demand, public health guidelines, and travel restrictions globally, as well as other factors, such as inflation and other cost pressures," the company said.
CEO Rousseau pointed to a number of positives as Air Canada strives to recover from an unprecedented crisis.
"Since the start of the year we have recalled more than 10,000 employees. We have expanded services to the U.S., and have launched new routes, such as to Cairo. We also announced expansions of our services to India and South America as well as the return next summer of popular seasonal destinations such as Barcelona, Venice, Nice and Reykjavik," Rousseau said.
The AC leader also identified fleet developments as a sign of optimism for the future.
"To support our network restoration, we have reversed our decision to cancel two Airbus A220 aircraft orders and are now accelerating deliveries of new Boeing 737 MAX aircraft. For our customers, we are pleased to bring back amenities such as onboard meal service and Maple Leaf Lounges," Rousseau said.
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