Air Canada to Upgrade Lounge, Cabin Experiences


Air Canada in the third quarter notched its first quarterly operating income since the March 2020 beginning of the Covid-19 pandemic, the carrier announced Friday. Meanwhile, corporate travel revenue increased throughout the quarter, and carrier executives on a Friday conference call noted that the profile of business travel demand is different than it was before 2020.

Air Canada’s third-quarter operating income was C$644 million (US$470 million) compared with a loss of C$364 million in the third quarter of 2021. Air Canada president and CEO Michael Rousseau on the call said the return to positive income was “an important step in our recovery.”

The carrier’s business travel volume increased from the second quarter, said EVP and chief commercial officer Lucie Guillemette, adding that bookings also increased month over month throughout the quarter. As some U.S. carriers have noted during their own earnings calls, Guillemette suggested that pandemic-fueled changes in work habits and structures have changed the nature of some business travel but hasn’t necessarily reduced it. 

“In terms of corporate demand, this whole return-to-the-office was once thought to keep people from traveling, but we now see that even the hybrid worker is returning to travel to reengage in person with colleagues, customers and suppliers,” Guillemette said. “You will recall that we saw an important return of this type of travel in June. … We expect premium economy, business-class revenues and trips for business to continue to grow. In fact, the revenue recovery of premium cabins has outpaced economy cabins.”

Guillemette add that new demand may be from organizations “not necessarily contracted with a corporate account at Air Canada,” but who are traveling for business and contributing to an increase in volume. 

“With respect to corporate, will we ever return to 2019 levels for pure corporate, the way we knew it? We’ll have to wait to see,” she said. “But there’s no doubt that we are seeing a new type of business traffic here, [with] customers combining a business trip with leisure. There’s definitely new segments that are emerging post-pandemic.”

Guillemette said third-quarter long-haul and U.S. point-of-sale business travel demand was “encouraging” but that short-haul business demand was “a little bit slower.”

The carrier has moved past the operational difficulties that plagued it in the spring, Rousseau said, noting that Air Canada has reached pre-pandemic levels of operational metrics like flight completion and baggage handling.

Q3 Metrics

Air Canada’s third-quarter passenger revenue increased to nearly C$4.82 billion (US$2.52 billion) from C$1.64 billion in the third quarter of 2021. Total revenue increased about 153 percent year over year to C$5.32 billion.

Air Canada said it expects its fourth-quarter capacity, as measured in available seat miles, to increase 60 percent year over year, to about 85 percent of the ASM capacity of the fourth quarter of 2019.

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