Air Canada saw cargo revenues increase 33 percent to a record $358 million in the second quarter of 2021.
However, the airline also lost $1.17 billion or $3.31 per diluted share, compared with a loss of $1.75 billion or $6.44 per share a year earlier.
Adjusted profits were $1.08 billion or $3.03 per share.
Revenues during the three months ended June 30 surged 58.8 per cent to $837 million from $527 million in the second quarter of 2020. Passenger revenues more than doubled to $426 million from a year ago which marked the first full quarter to be impacted by the pandemic.
Air Canada was expected to post $2.76 per share in adjusted profits on $848.2 million of revenues, according to financial data firm Refitinitv.
On June 14, 2021, Air Canada and Air Canada Cargo announced an initial list of planned routes for the Boeing 767-300ER freighters scheduled to enter service later in 2021. Since March 2020, Air Canada has operated more than 10,000 all-cargo flights using its wide-body passenger aircraft including certain temporarily modified Boeing 777 and Airbus A330 aircraft, which have additional available cargo space due to the removal of seats from the passenger cabin.
“We’re tremendously proud of the strongest quarterly results Air Canada Cargo has ever seen, which are a testament to our continued efforts to maintain stable and consistent capacity flows for our customers across the globe through cargo-only flying,” said Matthieu Casey, senior director, cargo global sales and revenue optimization, in a statement.
Passenger flights returning
The country’s largest airline increased its seat capacity by 78 percent compared to the same time last year, and was down 86 percent from the second quarter of 2019. It plans to increase available seat miles in the third quarter so capacity will be 65 per cent below the same period in 2019.
In August, its domestic capacity is expected to be about two-thirds of what it was in 2019.
“We’re relieved to see our passenger network starting to rebuild and continue to provide cargo-only flying in markets where capacity is still constrained. With the arrival of our first 767 freighters in Q4, the combination of these, our continued cargo-only flying and passenger flights resuming paints a strong portrait for the rest of the year,” Casey added.
The carrier says it has refunded about $1 billion for non-refundable tickets and expects to pay an additional $200 million in the third quarter, which will be covered by the federal government’s $1.4 billion refund credit facility.
The airline says it has recalled about 2,900 employees in June and July as it restores service this summer to destinations, particularly in Canada and the U.S. More workers will be called back for the fall season.
Recovery in demand
Air Canada is anticipating a recovery in demand in the coming months as travel restrictions are eased and leisure passengers look to get away after being grounded by COVID-19.
“The third-quarter outlook pointed to healthy demand recovery and a significant improvement in daily cash burn,” Walter Spracklin of RBC Dominion Securities wrote in a report.
Although overall bookings remain below pre-pandemic levels, customer interest began to increase in June with the elimination of quarantines for fully vaccinated returning Canadians and the removal of other travel restrictions.
“We can now optimistically say that we are turning a corner, and we expect to soon see correlated financial improvements,” CEO Michael Rousseau said Friday during a conference call.
“Indications are that the worst effects of the COVID-19 pandemic may now be behind us. Based on what we are seeing in other markets that are further along in reopening in Canada, we anticipate travel will resume at a quickening pace.”