Air Canada has reported a rise in profits in the second quarter (Q2) despite the negative impact of the grounding of its Boeing 737 Max fleet which it is to keep on the tarmac until January.
The airline also revealed it will be removing the 24 Boeing 737 Max from its schedule until at least 8 January, much the same as other airlines like American Airlines. A further 12 737 Max aircraft deliveries scheduled for 2019, it expects will now be delivered in 2020.
Air Canada’s made a profit of C$343 million in Q2 compared to a loss of $102 million in the same quarter last year while operating revenues reached $4.757 billion, $424 million more than Q2 in 2018. EBITDA (earnings before interest, taxes, depreciation, amortization and impairment) reached C$916 million compared to the C$739 million in Q2 last year.
Air Canada president and chief executive officer, Calin Rovinescu said although the results exceeded expectations, the Boeing 737 Max grounding negatively impacted EBITDA growth year-over-year.
“These are impressive results with revenue growth in each market segment and system passenger revenues up 10.7 per cent on capacity growth of 2.3 per cent. We also managed costs well, especially with the challenges of sourcing replacement flying for some of the Boeing 737 Max aircraft that are out of service,” he said.
Rovinescu added the impact of the Boeing 737 Max grounding will be felt more acutely in the very busy summer period. Q3 projected capacity is expected to decline approximately two per cent compared to Q3 of 2018.
In Q2, Air Canada acquired fellow Canadian carrier Transat A.T, which Rovinescu believes once closed will benefit all stakeholders.