A “perfect storm” of problems is driving Air Canada’s wave of flight delays over the summer, its chief executive says, even as the country’s largest airline is in the process of to return to profitability.
Despite increased staff and modernized technology, Air Canada’s operations in June and July fell short of “expected levels,” Michael Rousseau told analysts on a conference call Friday.
The CEO pointed to “harsh weather conditions” – thunderstorms, in particular – and “global supply chain issues”.
Flight delays and cancellations have particularly affected Air Canada’s extensive regional flight network, operated by Jazz Aviation. Mr. Rousseau referred to a shortage of pilots in the face of new competitors such as Flair Airlines and Lynx Air; stricter shift length regulations; as well as flight school enrollments which have declined during the COVID-19 pandemic.
“We’re in an almost ideal situation right now,” Rousseau said. We are working hard with our partner, Jazz, to resolve this issue now, but the transition will take some time. ยป
Despite tens of thousands of delayed flights in the second quarter, Air Canada posted profits that climbed to pre-pandemic levels, due to strong travel demand and higher fares.
The carrier reported a net profit of 838 million for its second quarter, compared to a loss of 386 million a year earlier – and nearly $1 billion in losses for the whole of 2022.
Canadians’ wanderlust has remained intact despite consistent delays across Air Canada’s network, with half of the carrier’s flights routinely arriving late or canceled altogether in the past two and a half months.
The company ranked last among North America’s ten largest airlines for on-time flight performance in July, according to a report released this week by aeronautical data firm Cirium.
Its planes arrived on time 51% of the time, compared to 62% for WestJet, which ranks seventh. Alaska Airlines, whose number of monthly flights is similar to Air Canada’s 36,000 flights, grabbed the top spot with 82%.
During the quarter ended June 30, Air Canada posted operating revenue up to $5.43 billion, compared to $3.98 billion for the same period a year earlier.
On an adjusted basis, diluted earnings were $1.85 per share, compared to a loss of $1.12 per share a year earlier, the Montreal-based company announced Friday. The latter figure exceeded analysts’ expectations of 68 cents per share, according to Refinitiv.
“Air Canada had a very strong quarter, benefiting from strong customer demand, full planes, high ticket prices and low fuel costs,” said Walter Spracklin, analyst at RBC Dominion Securities, in a note to clients.
