Air Canada continued to see severely depressed revenue in the second quarter amid the country's strict Covid-19 travel restrictions, but bookings in recent weeks have begun picking up as those restrictions have eased, executives said in an earnings call on Friday.
The carrier reported operating revenues of C$837 million in the second quarter, an improvement of 59 percent year over year but still less than a fifth of what it earned in the second quarter of 2019. Capacity during the quarter was down 86 percent compared with the second quarter of 2019.
In June, however, Air Canada saw "a significant increase in bookings" as travel restrictions eased for Canadians vaccinated against Covid-19, president and CEO Michael Rousseau said. Coupled with last week's news that Canada would begin welcoming vaccinated U.S. visitors in August and from the rest of the world in September, the carrier now is "turning a corner," he said.
"We are seeing steadily increasing bookings for the domestic, transborder and Atlantic markets, and to sun destinations for the coming winter," Rousseau said. "In fact, for next winter's sun travel, future bookings during some weeks in June were ahead of the same period in 2019, that hard-to-remember time before Covid-19."
Corporate travel, meanwhile, showed a "slight" improvement in June compared with March and April, EVP and CFO Lucie Guillemette said. Like U.S. carriers, Air Canada expects to see corporate volumes, particularly domestic volumes, improve in the fall, though it is likely to lag the recovery in the United States, she said.
For the third quarter, Air Canada expects to increase capacity to about 35 percent of its capacity in the third quarter of 2019. In a research note, Cowen analyst Helane Becker said it would likely take Air Canada until 2023 to reach its 2019 capacity levels, given the restrictions around long-haul international travel.
Air Canada reported a net cash burn of about C$8 million per day during the quarter, which was better than the C$13 million to C$15 million per day it had projected in May. It excepts to further reduce cash burn to C$3 million to C$5 million per day during the third quarter.
The company reported a net loss of C$1.17 billion in the second quarter, compared with a loss of C$1.75 billion in the second quarter of 2020.
RELATED: Air Canada Q1 earnings