Air Canada’s managed corporate segment demand is remaining steady, at about 25 percent to 30 percent below 2019 levels, Air Canada EVP of network planning and revenue management Mark Galardo said during a Monday third-quarter earnings call.
The carrier, however, continued to see “sustained recovery in the SME side, and that gives us some interesting yield prospects going forward,” Galardo said, adding that overall demand continued to track above 2019 levels. “This combined with the capacity constraints at the global industry level have continued to favor the yield environment, especially for our international markets.”
The best third-quarter regional performers for the carrier were Atlantic and Pacific routes, with yield increases of about 13 percent and 11 percent, respectively, year over year, Galardo said. “Most of the new international routes met or exceeded expectations.”
Premium revenue continued to perform strongly and was up 21 percent from a year prior, with demand from both leisure and business markets, Galardo said.
Air Canada Q3 Metrics
Air Canada reported third-quarter revenue of more than C$6.3 billion (US$4.5 billion), a 19.2 percent increase year over year. Passenger revenue was C$5.9 billion, a record for the quarter and nearly 22 percent higher than Q3 2022. International revenue for the quarter increased 32 percent year over year. Domestic and transborder revenue were up 3 percent and 32 percent, respectively. Net income was C$1.25 billion, up from a loss of C$508 million a year prior.
Third-quarter capacity increased 10 percent year over year, and the carrier also plans for a fourth-quarter increase of about 10 percent from a year prior. After some adjustments in 2023 to account for issues including regional pilot availability and supply chain pressures, plus the suspension of Air Canada’s Tel Aviv route, the carrier now expects full-year capacity to be up about 20 percent from 2022, compared with a prior projection of 21 percent.
Air Canada plans to move in the fourth quarter and first quarter of 2024 some capacity out of the North Atlantic and into the Pacific to take advantage of recovery opportunities in the region, Galardo said. The carrier will increase capacity to Japan and South Korea, add frequency to its new route to Bangkok and add an additional red-eye from Vancouver to Hong Kong.
