While continuing to show week-over-week improvement and an "accelerating recovery," Air Canada's business travel traffic currently is at about 50 percent of 2019 levels, EVP and COO Lucie Guillemette said Tuesday during a first-quarter earnings call.
"If I look at May and June, and project further, we're already seeing passing that threshold of being down 40 percent or so," Guillemette said, detailing the company's optimism for the segment. "Second, when we look at the indicator of small and medium[-sized enterprise] business travel, even if we don't have contractual agreements with some of these SMEs, we are seeing that that traffic is coming back."
For North America, Air Canada is seeing steady progress, and by September and October, Guillemette anticipated business travel could recover to 20 percent to 30 percent shy of 2019 levels.
"There's an opportunity to capture some corporate demand in the U.S., which has recovered faster than demand in Canada, but of all the segments where we are very excited to see the return, it would be in this area," she said. "We are definitely seeing signs of recovery. … On the yield side as well, we are seeing positive yields versus 2019 for returning corporate travel."
Overall, it was an "interesting" first quarter, which started slow due to the omicron variant and ended on a "very positive note" with the elimination of several travel restrictions, "resulting in March bookings coming in over 90 percent of March 2019 levels," said Air Canada president and CEO Michael Rousseau. "This is also a very positive leading indicator to much stronger Q2 and Q3 results."
Due to renewed demand for travel, the company increased first-quarter capacity about 2 percent from the prior quarter and almost 240 percent compared with the first quarter of 2021, Rousseau said. First-quarter 2022 capacity was at about 55 percent of the same period for 2019. During the first quarter, the carrier also announced it would add new routes to the United States and restore 41 North American routes. With these additions, Air Canada expects to achieve this summer 90 percent of its pre-pandemic North American capacity, Guillemette said.
Air Canada reported a first-quarter operating loss of C$550 million (US$429.7 million) on revenue of $2.57 billion (US$2.01 billion). These figures are up from an operating loss of C$1.05 billion (US$820.3 million) one year prior on revenue that was about 3.5 times lower in Q1 2021. First-quarter passenger revenue of C$1.92 billion (US$1.5 billion) increased nearly five times from the first quarter of 2021, according to the company.
U.S. transborder passenger revenue of $425 million increased $396 million from the first quarter of 2021, Guillemette said.
For the second quarter, Air Canada plans to increase its capacity by about 414 percent from the same quarter in 2021, which is equal to about 73 percent of second-quarter 2019 capacity, according to the company.
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