Air Canada raises full-year core profit outlook on strong demand

(Reuters) – Air Canada on Thursday raised its full-year forecast for core profit, citing a stronger-than-anticipated demand environment and lower-than-expected fuel costs.

The move comes as easing restrictions spurred leisure and international travel demand, helping carriers to mitigate cost pressures even as rising inflation is making leisure activities more expensive.

Canada’s largest carrier said it now expects 2023 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) at about $3.5 – $4.0 billion, up from prior outlook of about $2.5 – $3.0 billion.

In February, Air Canada Chief Executive Michael Rousseau said travel demand for leisure and visiting friends and relatives is making up for lower demand by business travellers.

The carrier said it expects its 2023 capacity to increase by about 23% from a year earlier to hit 90% of pre-pandemic levels, but down from 24% forecast earlier.