Air Canada does not see the moment when a moderation in fuel prices would lead it to reduce the price of its plane tickets. With the strong demand, the management of the air carrier considers that it has the big end of the stick to determine its prices.
“There is no pressure at the moment (to lower prices), replied the chief financial officer, Amos Kazzaz, during a conference call on Friday to discuss the results of the first quarter. The demand is strong. Capacity is limited as aircraft manufacturers struggle to deliver new aircraft to market. »
The company has seen a moderation, but average fuel prices are still 30% higher in the first quarter than at the same time last year, says Kazzaz, who is retiring at the end of June.
“The price of fuel remains volatile and we do not see any long-term trends that would indicate a change to a significant component of our costs. »
The price of fuel is lower than the company’s annual forecast for 2023, but the chief financial officer believes this is a “transitional” phenomenon. “It remains volatile with all the supply and refinery issues. »
In addition to oil, Mr. Amos sees a “stabilization” of certain costs, in particular for food served in flight, ground handling, maintenance and technology.
Record revenues
Air Canada reported results that beat analysts’ expectations as the post-pandemic recovery in air travel remains resilient, despite economic uncertainty and rising interest rates.
President and CEO Michael Rousseau says he is “extremely pleased” to see revenues at $4.9 billion reach a record high for a first quarter. “Looking at bookings for the rest of the year, we believe demand will continue. »
The company posted an operating loss of $17 million, compared to a loss of $550 million in the same period last year.
Air Canada posted net income of $4 million, but excluding accounting items, it posted an adjusted net loss of $188 million, compared to a loss of $747 million. Adjusted diluted net loss per share is 53 cents.
Prior to the earnings release, analysts had expected a loss per share of 74 cents and revenue of $4.4 billion, according to financial data firm Refinitiv.
The action of Air Canada, however, rose 48 cents, or 2.33%, to 21.49 dollars, on the Toronto Stock Exchange, in the morning.