Air Canada cuts 2024 profit forecast as over-capacity impacts pricing

Air Canada cut its full-year core profit forecast on Monday (July 22) as over-capacity in some markets and competition on international routes has impacted pricing.

The updated outlook also reflects lesser-than-expected load factors for the second half of the year, the airline noted in a press release.

Air Canada’s second-quarter preliminary results show operating revenues of about $5.5 billion, on 6.5 per cent increased operated capacity year-over-year, as compared to about $5.4 billion in Q2 2023.

The carrier also forecasts a Q2 operating income of $466 million, compared with $802 million reported a year earlier.

Air Canada's adjusted earnings

Air Canada is reporting an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $914 million, as compared to about $1.2 billion in Q2 2023.

The adjusted EBITDA also reflects assumptions relating to the price of jet fuel and a weakened Canadian dollar against the U.S. dollar, Air Canada said.

The company’s updated capacity guidance, meanwhile, accounts for sustained supply chain pressures, evolving market conditions and ongoing geopolitical issues, the airline said.

“Air Canada continues to see a healthy demand environment. The second quarter operating revenues would represent a record for a second quarter, with load factors remaining above historical averages,” the airline said in a statement.

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