A rush among carriers to cash in on summer travel demand has forced airlines to offer ticket discounts to fill their planes.
The updated forecast reflects the lower yield environment, less-than-expected load factors for the year’s second half, and competitive pressures in international markets, Canada’s largest carrier said on Monday.
The airline now expects its 2024 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be in the range of C$3.1 billion ($2.26 billion) to C$3.4 billion, compared with its previous forecast of C$3.7 billion to C$4.2 billion.
“Although the carrier seems to have made some strides in managing its seat mile costs, the demand environment looks weaker than we anticipated,” Citi analyst Stephen Trent wrote in a note.
Air Canada reported preliminary second-quarter operating revenue of C$5.5 billion, up 1.7% from a year earlier. Analysts on average were expecting C$5.65 billion, according to LSEG data.
The carrier also expects a second-quarter operating income of C$466 million, compared with C$802 million reported a year earlier.
($1 = 1.3740 Canadian dollars)
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