Unlike the positivity seen in the United States over the past week or so, Canadian flag carrier Air Canada has posted a loss for the second quarter of 2021. The airline’s net loss of $1.165 billion (US$927 million) compares to a loss of $1.752 billion (US$1.393 billion) in the second quarter of last year.
It’s that time of the year again when companies from around the aviation industry release their results for the second quarter. So far, we’ve seen lots of profits from the major US airlines, with Southwest posting a $348 million profit. However, it seems as though the picture is slightly different over the country’s northern border.
Continuing to feel the pandemic
Air Canada saw its financial results continue to be impacted by the COVID-19 pandemic. With that being said, things aren’t as bad as they were at the pandemic’s start. The airline’s operating revenue increased 59% year on year by $310 million (US$246 million) to $837 million (US$665 million) in 2021.
Commenting on the results, the airline’s CEO, Michael Rousseau, said,
“The COVID-19 pandemic continued to weigh on Air Canada and the Canadian airline industry in the second quarter, with its impact on travel reflected in our results… Our employees, as they always have, focused on taking care of our customers while carrying them safely to their destinations, and continued to ensure the prudent management of our company.”
The airline’s flight operations continue to be severely reduced. The airline’s number of Available Seat Miles (ASMs) increased by 78% compared to last year. While that sounds relatively impressive, it remains 86% lower than in the second quarter of 2019. Available Seat Miles means the number of seats offered by the airline, multiplied by the number of miles they fly. For example, an airplane with 20 seats traveling 100 miles would have 2,000 available seat miles.
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Are things about to get better?
While things haven’t been great in recent quarters, Air Canada believes things should start becoming better. Rousseau commented that he was happy to see increasing vaccination rates. As a result, Canada has changed its restrictions meaning that fully vaccinated Canadians no longer have to quarantine when entering the country. This has led to a considerable increase in bookings for the airline. He commented that Air Canada’s Employees and Stakeholders should be encouraged by positive industry trends.
The airline is planning to increase its ASMs further for the third quarter. It hopes that ASMs will only be 65% lower than 2019. The airline expects to burn roughly $3-5 million (US$2.4-4.0 million) each day on average through the quarter, although the airline doesn’t include the remaining amount of expected refunds in that burn. The airline began giving refunds in April 2021 for flights not taken since the start of February 2020.
What do you make of Canada’s second quarter? Will the third quarter be better? Let us know what you think and why in the comments below!