Air Canada lifts core profit expectations on international travel boom

(Reuters) -Air Canada said on Monday it expects 2023 core profit towards the higher range of its previous forecast, after the carrier beat third-quarter profit estimates, benefiting from strong demand for international travel.

North American airlines operating international flights are benefiting from sustained demand for long-haul journeys as more people plan holidays abroad, despite contending with higher costs.

Such airlines are facing pressures from higher labor costs, with pilots at U.S. legacy carriers nabbing steep pay increases in new contracts or tentative agreements.

Last month, Air Canada pilots staged a protest demanding better pay and benefits as talks over a new contract covering 4,500 pilots at the company continue.

“Our demonstrated adaptability, combined with a stable demand environment, give us every confidence for the rest of the year and into 2024 despite the inevitable headwinds to which our global industry is prone,” CEO Michael Rousseau said.

Canada’s largest airline posted adjusted profit of C$3.41 per share for the quarter ended Sept. 30, compared with analysts’ average estimate of C$2.15 per share, according to LSEG data.

The company now expects its 2023 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) toward the higher end of its previous forecast range of about C$3.75 billion to C$4.0 billion.

The Canadian carrier’s quarterly operating revenue rose 19.2% to C$6.34 billion, beating analysts’ average expectations of C$6.10 billion.