Air Canada reported a decline in net profit for the third quarter of 2023, primarily attributed to a strike by various airport workers earlier in the quarter. Despite strong travel demand and increased revenues, operational disruptions and associated costs impacted the airline’s bottom line.
The strike, involving over 200 Swissport employees at Montreal-Trudeau and Toronto Pearson International Airports, led to significant operational challenges. These included the cancellation or delay of approximately 700 flights, causing inconvenience to customers and resulting in additional operating expenses for Air Canada.
Despite these headwinds, Air Canada experienced robust demand for air travel, leading to an increase in operating revenue for the quarter. The airline saw a substantial rise in available seat miles (ASM) and carried over 13 million passengers during the period. Michael Rousseau, Air Canada’s President and Chief Executive Officer, acknowledged the strong demand environment, highlighting the company’s efforts to improve operational reliability and customer service despite the strike’s impact.
The company successfully navigated peak summer travel, managing record passenger volumes with improved on-time performance and baggage handling compared to the previous year. Air Canada continues to focus on enhancing its operational stability and efficiency, emphasizing network optimization and customer satisfaction. Looking ahead, Air Canada maintains a positive outlook for the fourth quarter and the full year 2023, expecting continued strong adjusted EBITDA and positive adjusted net income and free cash flow.
Key Points
- Net income Q3 2023: $644 million
- Net income Q3 2022: $955 million
- Diluted earnings per share Q3 2023: $1.61
- Diluted earnings per share Q3 2022: $2.64
- Operating revenue Q3 2023: $6.34 billion
- Operating revenue Q3 2022: $5.32 billion
- Operating expenses Q3 2023: $5.44 billion
- Operating expenses Q3 2022: $4.85 billion
- Operating income Q3 2023: $902 million
- Operating income Q3 2022: $473 million
- Adjusted net income Q3 2023: $490 million
- Adjusted net income Q3 2022: $30 million
- Adjusted earnings per share Q3 2023: $1.21
- Adjusted earnings per share Q3 2022: $0.09
- Adjusted EBITDA Q3 2023: $1.52 billion
- Adjusted EBITDA Q3 2022: $870 million
- Available Seat Miles (ASM) increase: 12% compared to Q3 2022
- Passengers carried in Q3: Over 13 million
- Total employees: Over 40,000
- Swissport employees involved in strike: Over 200
- Flights cancelled or delayed due to strike: Approximately 700
- Q4 2023 adjusted EBITDA outlook: Around $1 billion
- Full-year 2023 adjusted EBITDA outlook: Between $3.7 billion and $4.0 billion
- Full-year 2023 adjusted net income outlook: Positive
- Full-year 2023 free cash flow outlook: Positive
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