Air Canada: Business travel reaches half of ’19 levels

Although Air Canada continues to show week-on-week improvements and an “accelerating recovery,” Air Canada’s business travel traffic is currently at around 50 percent of 2019 levels, EVP and COO Lucie Guillemette said Tuesday during a first-quarter earnings call.

“If I look at May and June and project further, we already see that we are crossing that threshold of being down by 40 percent or so,” Guillemette said, describing the company’s optimism for the segment. “Secondly, when we look at the small and medium-sized indicator[-sized enterprise] business travel, even though we do not have contractual agreements with any of these SMEs, we see that traffic coming back. “

For North America, Air Canada is experiencing steady progress, and in September and October, Guillemette expected business travel to recover to 20-30 percent compared to 2019 levels.

“There is an opportunity to capture the demand of some companies in the US, which has recovered faster than the demand in Canada, but of all the segments where we are very excited to see returns, it would be in this area,” she said. “We are clearly seeing signs of improvement. … Also on the return side, we are seeing positive returns compared to 2019 for recurring business trips.”

Overall, it was an “interesting” first quarter, which started slowly due to the omicron variant and ended on a “very positive note” with the elimination of several travel restrictions, “resulting in March bookings coming in at over 90 percent of March 2019 levels, “said Air Canada President and CEO Michael Rousseau. “This is also a very positive leading indicator for much stronger Q2 and Q3 results.”

Due to renewed demand for travel, the company increased capacity in the first quarter by about 2 percent from the previous quarter and nearly 240 percent compared to the first quarter of 2021, Rousseau said. Capacity in the first quarter of 2022 was around 55 percent from the same period for 2019. During the first quarter, the airline also announced that it would add new routes to the United States and restore 41 North American routes. With these additions, Air Canada expects to achieve 90 percent of its pre-pandemic North American capacity this summer, Guillemette said.

Air Canada reported an operating loss in the first quarter of C $ 550 million (US $ 429.7 million) on revenue of $ 2.57 billion (US $ 2.01 billion). These figures have increased from an operating loss of C $ 1.05 billion (US $ 820.3 million) a year earlier on a turnover that was about 3.5 times lower in the first quarter of 2021. Passenger revenue in the first quarter of 1 .92 billion C $ (1.5 billion US $) increased almost fivefold from the first quarter of 2021 according to the company.

US $ 425 million in cross-border passenger revenue increased $ 396 million from the first quarter of 2021, Guillemette said.

For the second quarter, Air Canada plans to increase its capacity by about 414 percent from the same quarter in 2021, which equates to about 73 percent of capacity in the second quarter of 2019, according to the company.

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