Air Canada revenue climbs on record cargo results

Air Canada sees hope on the horizon as revenues soared over 2020 levels last quarter, despite continuing to operate far below pre-pandemic capacity and at a loss of hundreds of millions of dollars.

Domestic leisure bookings have started to rebound, but business travel remains down across the board amid the persistence of remote work.

“We’re witnessing a strong rebound in VFR (visiting friends and relatives), and leisure traffic remains strong, specifically within North America, across the Atlantic and to sun destinations,” chief operating officer Lucie Guillemette told investors on a conference call Tuesday.

“We were pretty confident that come 2022 corporate Canada returns to their offices and business travel should return. But no doubt that for us, business has lagged a little bit.”

Revenue nearly tripled year over year to $2.10 billion in the quarter ended Sept. 30 alongside an 87 percent boost in capacity. But revenue and capacity remained more than 60 percent and two-thirds below Air Canada’s third-quarter figures in 2019 respectively as COVID-19 fallout continues to damage carriers’ bottom lines.

“There’s no textbook on this type of recovery, or any in the history. There’s no doubt we’re very encouraged by what we see. And there’s no doubt that the length of the recovery has moved in from the consensus of 2025 to at least 2024 and maybe 2023,” chief executive Michael Rousseau said.

In its outlook, the country’s largest airline said it plans to increase its fourth-quarter capacity by about 135 percent compared with the same quarter in 2020. Compared with the same quarter in 2019, fourth-quarter capacity is expected to drop 47 percent.

Rousseau also stressed a record cargo performance of more than $1 billion so far this year. The carrier began to shift toward air freight last spring, converting several of its retired Boeing 767 jetliners to cargo aircraft.

With fewer flights and less cargo being transported in the luggage compartments of passenger planes, the price of shipping cargo by air has increased. Other airlines such as American Airlines and United Airlines also began operating cargo-only last year, hoping to use the opportunity to stem their losses.

“Air Canada Cargo is pleased to have reported record-breaking results for the third quarter of 2021. As the markets continue to show robustness, Air Canada Cargo remains committed to maintaining consistent cargo capacity to its customers on key trade lanes,” said Jason Berry, vice-president, cargo, at Air Canada.

Air Canada Cargo’s third quarter results of $366 million is an increase of 69 percent over Q3 of 2020, and more than double the same quarter in 2019. At the close of the third quarter, Air Canada Cargo’s year-to-date results reached a record $1 billion.

Air Canada reported a loss of $640 million in its third quarter even as operating revenue nearly tripled compared with a year ago.

The loss amounted to $1.79 per diluted share last quarter compared with a loss of $685 million or $2.31 per diluted share a year earlier, the airline said.