Air Canada (AC) posts net loss of C$386M in Q2: What's next?

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Air Canada (AC) posts net loss of C$386M in Q2: What's next?

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 Air Canada (AC) posts net loss of C$386M in Q2: What's next?
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Highlights

  • Air Canada’s cost per available seat mile (ASM) dropped to 20.8 cents from 49.3 cents.
  • Air Canada finalized a deal in July 2022 to buy two brand-new Boeing 777 freighters.
  • Air Canada recorded a net loss of C$ 386 million in Q2 2022.

Despite claiming to have had an almost five-fold rise in sales, Air Canada recorded a net loss of C$ 386 million in Q2 2022 compared to C$ 1.17 billion a year earlier.

According to the airline, its loss was C$ 1.6 per diluted share for the three months ending June 30, down from the second quarter of 2021's loss of C$ 3.31 per diluted share.

The overall revenue was C$ 3.98 billion, up from C$ 837 million at this time last year. Michael Rousseau, Air Canada's chief executive officer (CEO), said that the last three months were difficult for Air Canada from an operational standpoint.

The CEO said that the flagship carrier safely flew over 9.1 million customers in Q2 2022, up by around eight million than the number of passengers carried in Q2 2021.

Financial performance of Air Canada

According to Air Canada, its cost per available seat mile (ASM) dropped to 20.8 cents from 49.3 cents in the same comparable period. In Q2 2022, the cash from operations amounted to C$ 1.07 billion compared to cash utilized in operations worth C$ 1.37 billion in Q2 2021. Air Canada said better-operating results and robust advance ticket sales were the primary drivers of this C$ 2.454 billion boost.

Air Canada's free cash flow jumped to C$ 441 million in the second quarter compared to a negative free cash flow of C$ 1.6 billion in the second quarter of 2021.


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What's next for Air Canada?

In the third quarter, the Canadian carrier expects to increase its ASM capacity by 131 per cent compared to its capacity in Q3 2021. Air Canada anticipates Adjusted CASM to increase by 15% to 17% from 2019 levels in 2022. The increase in clients carried, which results in higher passenger service, is the primary cause of the deviation from past guidance.

Air Canada finalized a deal in July 2022 to buy two brand-new Boeing 777 freighters, with deliveries scheduled for 2024.

Bottom line

The largest airline in Canada, Air Canada is also the national carrier and a founding member of Star Alliance, the largest air transportation alliance in the world, which will mark its 25th anniversary in 2022. Air Canada offers direct scheduled passenger service to 86 overseas airports in addition to 51 airports inside Canada and the United States.

Please note, the above content constitutes a very preliminary observation or view based on digital trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

Despite claiming to have had an almost five-fold rise in sales, Air Canada recorded a net loss of C$ 386 million in Q2 2022 compared to C$ 1.17 billion a year earlier.

According to the airline, its loss was C$ 1.6 per diluted share for the three months ending June 30, down from the second quarter of 2021's loss of C$ 3.31 per diluted share.

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