As with other carriers, the Covid-19 omicron variant negatively affected Air Canada's recovery at the end of last year's fourth quarter and into the first quarter of 2022, executives said during a fourth-quarter earnings call Friday, but business in February has started to rebound.
The company had started to see some improvement in the corporate travel segment, particularly for travel in North America, but it stalled when omicron hit and travel restrictions increased, Air Canada EVP and COO Lucie Guillemette said during the call. Over the past three weeks, however, "we do see slow but [steady] progress week over week," she added. "As travel restrictions ease, testing requirements become easier, those are first steps, more needs to be done. As corporations come back into the office, we can see the sentiment is there."
Small and midsize enterprises have shown signs of resiliency, as have companies in particular industries, and the company anticipates that to continue, Guillemette said. "We believe we will see a rebound of business travel in 2022, when conditions continue to improve and as corporate Canada returns to office and people look to connect in person with stakeholders. We consistently hear from corporate customers there is an intent to travel again."
Both Guillemette and Air Canada president and CEO Michael Rousseau noted Canada's recent easing of travel restrictions, set to begin Feb. 28, which they believe will help aid the recovery. "As we move into 2022, expectations are that Covid will recede," Rousseau said. "For this reason and with the government recently announcing the beginning of our phased easing of travel restrictions, we are confident the recovery of our business will continue throughout the balance of the year and beyond."
Guillemette said that company was seeing strong demand with the exception of Asia-Pacific, and that it was looking to expand services to the United States. Air Canada started 2021 with 245 daily flights scheduled and ended the year with 665.
Quarterly capacity more than doubled compared with Q4 2020, but it was down about 47 percent compared with 2019, Guillemette said. Prior to omicron, the company's ticket sales reached 65 percent of pre-pandemic levels in October and November.
Still, Air Canada also reported a fourth-quarter operating loss of C$503 million (US$393.6 million), about half its loss from the third quarter. The full-year loss was C$3 billion. Fourth-quarter revenue increased 30 percent from the third quarter, to C$2.7 billion.
The carrier for the first time in seven quarters reported positive earnings before interest, taxes, depreciation and amortization, of C$22 million (US$17.2 million).
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