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Air Canada profit falls as excess capacity hurts prices

North American carriers are also facing heightened costs associated with labour and aircraft maintenance

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Air Canada's profit fell to C$410 million, or C$1.04 per share, from C$838 million, or C$2.34 per share, a year earlier. — Reuters File

By Reuters

Published: Wed 7 Aug 2024, 2:27 PM

Air Canada reported a lower second-quarter profit on Wednesday, as excess capacity in certain markets and stiff competition on international routes hurt its pricing power.

North American carriers are struggling to protect their pricing power as a rush to cash in on booming demand for summer travel left them with excess capacity, forcing them to offer discounts to fill seats.

Last month, the carrier cut its full-year core profit forecast citing a lower yield environment and competition in international markets.

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Airlines are also facing heightened costs associated with labour and aircraft maintenance.

Air Canada is yet to finalise a new contract with the union representing its pilots, which might come with additional cost pressures for Canada's largest airline.

The carrier's profit fell to C$410 million ($298.23 million) or C$1.04 per share, from C$838 million, or C$2.34 per share, a year earlier.

The Canadian carrier's operating revenue rose two per cent to C$5.52 billion in the quarter ended June 30.

Reuters

Published: Wed 7 Aug 2024, 2:27 PM

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