Air Canada announced it will increase capacity on routes within Canada, as well as in Europe, the Caribbean, and Latin America, in response to declining travel to the United States due to trade tensions between the two countries.
Air Canada’s Chief Commercial Officer, Mark Galardo, stated in a conference call on Wednesday that the company rapidly adjusted its flight structure in the third quarter to meet growing domestic travel demand. He noted, “Winter sunshine destinations and the Latin American market performed strongly, with bookings significantly higher than last year.”
In contrast, demand for flights between Canada and the United States remains sluggish. Statistics Canada data shows that the number of Canadians returning to Canada by air from the United States in September this year fell by 27% compared to the same period last year, while travellers to other overseas regions increased by about 4%, but this was not enough to offset the decline in travel to the United States.
Air Canada stated that despite weak demand for cross-border flights, overall capacity will still see a slight increase this year.
In August of this year, more than 10,000 Air Canada cabin crew members staged a three-day strike, resulting in the cancellation of more than 3,000 flights and causing the company to suffer losses of approximately C$375 million. Following the strike, Air Canada lowered its adjusted full-year profit forecast and cut approximately 400 management positions to control costs.
The latest financial report shows that in the third quarter ending September 30, the company’s revenue fell more than 5% year-over-year to C$5.77 billion, including approximately C$90 million in compensation payments to passengers. Net profit fell to C$264 million, significantly lower than C$2.04 billion in the same period last year.
Adjusted earnings per share were C$0.75, significantly lower than C$2.57 in the same period last year and analysts’ expectations of C$0.95.