Unlike the three largest U.S. carriers, each of which reported first-quarter growth in business travel demand, Air Canada’s overall corporate segment “remains steady,” EVP of revenue and network planning Mark Galardo said during a Thursday earnings call.
Business travel demand within Canada “was relatively flat,” but the carrier in late Q1 and so far in Q2 is starting to see some “very encouraging signals on corporate demand,” citing “10 percent to 20 percent greater on a year-over-year basis,” Galardo said. He added that the emergence of the tech sector traveling again as well as the transportation sector, “is a very, very good sign for a rebuild on the corporate demand side.”
Air Canada particularly is “very bullish and favorable on the U.S. prospects,” Galardo added. “In Q1, we saw corporate demand to and from the U.S. rise year over year to the tune of almost 10 percent.”
But with lower growth on domestic demand, the carrier is not materially changing its assumptions for the segment in 2024, but “if we see a few more months of this [U.S. pattern], that might change our view of the year,” Galardo added.
Air Canada Q1 Metrics
Air Canada reported first-quarter operating revenue of more than C$5.2 billion (US$3.9 billion), up 6.9 percent year over year. Passenger revenue was more than C$4.4 billion, representing a 9 percent gain versus a year prior, Galardo said.
The carrier’s net loss for the quarter was C$81 million compared with income of C$4 million in Q1 2023. Capacity increased 11.1 percent year over year. Average fuel costs were nearly C$1.06 per liter. Air Canada reported nearly 10.8 million passengers for the quarter, up 7.8 percent from a year prior.
Full-year 2024 guidance includes a capacity increase of 6 percent to 8 percent year over year, and an average fuel price of C$1.03 per liter.
