Air Canada saw travel demand pick up in its most recent quarter, but the airline still posted a net loss of $386 million as it continues to face “operational volatility” in the post-pandemic boom. While the Montreal-based airline says it expects operations to improve in the coming weeks, executives apologized to customers on Tuesday, saying the challenges seen throughout the second quarter were “not at all out of the ordinary for us or anyone else involved ». “We did not achieve an acceptable level of operational stability, and for that we apologize to our customers and employees who were affected,” Air Canada chief operating officer Craig Landry said on a conference call with analysts. “I can assure everyone, however, that our highest priority across the company has been and remains to work with all participants in the journey to eliminate any remaining volatility and return our operations to pre-pandemic levels of stability.” A surge in travel demand in the post-pandemic recovery has strained the global air transport system and led to difficulties for Air Canada and chaos at some of the country’s busiest airports. The summer surge has pushed Air Canada and Toronto’s Pearson Airport to the top of global flight delay lists, with Canada’s largest airline often reaching No. 1 for rate of travel delays — as many as two-thirds of scheduled flights in some days. June and July. The fights come as the airline’s total sales in the quarter reached $3.98 billion, nearly five times the same period last year. Air Canada says it flew nearly as many passengers — 70 percent — in the three-month period ended June 30 as it did in all of 2021. It flew more than 9.1 million customers in the quarter, nearly 8 million more than in the same period in 2021. “In Canada, we’ve come through an almost two-year shutdown of air travel, back to capacity levels close to 80 percent of 2019,” CEO Michael Rousseau said on the conference call. The story continues “We prepared well in advance of 2022 for a sharp increase in travel demand… but despite planning, the increased traffic has created difficulties for all participants in the air transport system.” Air Canada entered the peak summer travel season at nearly 90 percent of its pre-pandemic staffing levels, but Landry pointed to system-wide challenges that “have begun to show various signs of unprecedented volatility.” “These impacts were primarily driven by resource challenges and could be seen in airport security screening, Canadian and US border customs processing, air traffic control, maintenance providers, equipment, supply chain, aircraft catering partners and supply, to name just a few’. he said, adding that a series of mechanical failures in the airport’s baggage handling systems at key hubs also contributed to the ongoing issues. “This type of instability in the delivery chain has a direct impact on our operations. It creates flight delays, flight cancellations and increased incidents of missed connections and baggage mishandling.” The airline cut more than 15 percent of its scheduled flights in July and August in order to improve operational stability. So far, Rousseau says operational metrics are improving. “Baggage is getting better, on-time performance is getting better, cancellations are going down and it’s a collective effort that we’re all working together … to make sure we can deliver a consistent level of service to our customers,” he said. “We are encouraged by the progress made in recent weeks and expect continued improvement in the coming weeks.” RBC Capital Markets analyst Walter Spracklin said in a note to clients on Tuesday that the results showed that the road to recovery from the COVID-19 pandemic will have “bumps” but that it “points in the right direction.” “The near-total shutdown the company suffered during the pandemic and the speed of the subsequent restart have tested the entire air travel infrastructure, not just Air Canada,” Spracklin wrote. “While the ensuing disruption is not surprising, we were encouraged by management’s commentary on the call, which implied that the worst is behind us.” Air Canada reported a second-quarter loss of $386 million, or $1.60 per share, compared with a net loss of $1.165 billion last year, or $3.31 per diluted share. However, the loss was below expectations. Analysts had expected a loss of 83 cents per share, according to financial data firm Refinitiv. The airline’s stock was up about 1 percent as of 12:15 p.m. ET, trading at $17.55 per share. With files from The Canadian Press Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj. Download the Yahoo Finance app, available for Apple and Android.
