Air Canada’s second-quarter results have shown bookings have risen but operating losses have worsened from earlier in the year.
The carrier lost $1.5 billion this time in 2020, and recorded a $1.13 billion loss this quarter. But the first quarter of 2021 saw a loss of $1.05 billion.
But its net cash burn was $745 million – around $8 million per day – which was significantly lower than the company’s projections of $13-$15 million per day.
“We attribute this to increased bookings and our continuing effective cost controls,” said Michael Rousseau, president and chief executive of Air Canada.
“We have seen in countries where reopening is further along than in Canada that the easing of travel restrictions not only facilitates travel but also drives additional demand for air travel and provides a potent stimulus to overall economic activity.”
Air Canada reported a steady increase of domestic bookings over the second-quarter period, as its transborder and Atlantic routes restored.
On 19 July, the company announced its summer schedule including 55 routes and 34 destinations to the US, operating 220 flights per day.
This follows the change that will commence on 9 August where all vaccinated American tourists can enter Canada after a 16-month ban between both nations on non-essential travel.
Rousseau told analysts that “future bookings during some weeks in June were ahead of the same period in 2019”, according to Reuters.
This is significant as 2019 was Canada’s best year for tourism on record, reporting 22.1 million visitors and 2.2 per cent higher seat capacity.
The carrier’s operating revenue improved, increasing 59 per cent compared with the first quarter of 2020, reaching $837 million.
Its first quarter revenue reached to $729 million, which was a decline of $2.99 billion – 80 per cent – from the same time in 2020.
This was at the time when the pandemic had only just begun and air travel had not been severely impacted yet.
As the airline continues to record mammoth losses, it entered a financing agreement with the government that gave Air Canada access to $5.88 billion in liquidity.
Air Canada will continue to pay the loan back, and will disclose later this year whether the company will opt out of the funding.
Air Canada expects to increase its capacity next quarter by 85 per cent and to record a cash burn of around $3-$5 million per day.