Air Canada broke even in the first quarter, taking advantage of pent-up demand for travel and lower fuel costs as it continues its post-pandemic recovery.
Canada’s largest airline said revenue was C$4.9 billion ($3.6 billion), nearly double last year’s first quarter, when Canada still had some Covid restrictions in place. That easily beat analysts’ estimates for C$4.5 billion, according to data compiled by Bloomberg.
“Our first quarter financial results exceeded both internal and external expectations and we expect demand to persist, supported by strong advance bookings for the remainder of the year,” Chief Executive Officer Michael Rousseau said in a news release.
On the bottom line, the airline earned C$4 million. It posted a small operating loss of C$17 million.
The Montreal-based company expects to increase capacity by about 23% this year, bringing it to about 90% of pre-pandemic levels.
“While it is our view that demand and pricing is expected to weaken post-summer, we are mindful of a potential structural shift in the nature of airline demand that may see travel hold up despite a weakening economy,” RBC Capital Markets analyst Walter Spracklin said in a note to clients.
