Air Canada has cut its full-year earnings expectations as yields and load factors are anticipated to be lower than expected, and international markets experience what the airline calls ”competitive pressures”.
The Montreal-based carrier said on 22 July it now expects earnings before interest tax, depreciation and amortisation (EBITDA) to be between C$3.1 billion ($2.26 billion) and C$3.4 billion. That is down from a previous guidance range of C$3.7 billion to C$4.2 billion.
“The updated 2024 adjusted EBITDA guidance range is largely driven by the lower yield environment, lower-than-expected load factors for the second half of the year and competitive pressures in international markets,” the company says. “It also reflects our assumptions including those relating to the price of jet fuel and a weakened Canadian dollar against the US dollar.”
It now expects to lift capacity as measured in available seat miles iby between 5.5% to 6.5%, lower than its previous expectations of a 6% to 8% increase.
The company also released preliminary earnings figures for the second quarter of the year, which ended on 30 June. Revenue rose to C$5.5 billion, up slightly from C$5.4 billion in the same period a year earlier.
“Air Canada continues to see a healthy demand environment,” the company says. “The second quarter operating revenues would represent a record for a second quarter, with load factors remaining above historical averages.”
Operating income was C$466 million, with an operating margin of 8.4%, as compared to C$802 million in the same quarter last year.
The Canadian airline will report more comprehensive second-quarter results on 7 August.
