Air Canada AC.TO lifted forecast for its 2024 core profit on Friday, as Canada’s largest carrier benefits from resilient demand for international travel.
North American carriers with major international operations are benefiting from a rise in demand, as consumers choose to spend on experiences over goods despite a squeeze in budgets.
Airlines were able to cash in on the strong holiday travel period, which saw an influx of travelers. About 2.6 million customers took Air Canada flights between Dec. 18 and Jan. 6, about 10% more than in the same period in 2022.
“We strengthened our balance sheet, reduced our debt and, despite the continuing macroeconomic and structural cost pressures on our industry, our unit costs were contained within our adjusted CASM (cost per available seat mile) guidance,” Air Canada CEO Michael Rousseau said.
The airline now expects its 2024 core profit to be in the range of $3.7 billion (US$2.75 billion) to $4.2 billion (US$3.12 billion), compared with a target of $3.5 billion to $4.0 billion it provided in February last year.
Analysts on average were expecting adjusted EBITDA of $3.76 billion, according to LSEG data.
The Canadian carrier’s operating revenue rose 11 per cent to $5.18 billion in the fourth quarter, beating Street expectations of $5.12 billion.
The company, however, reported a wider-than-expected adjusted per-share loss of $0.12, compared with analysts’ expectations of $0.04, owing to high labor costs as the airline hired more staff to handle holiday period traffic.
Reporting by Shivansh Tiwary in Bengaluru; Editing by Maju Samuel and Shilpi Majumdar