Air Canada reported a higher-than-expected profit for the second quarter on Tuesday, as the carrier flew more high-paying passengers, helping it weather the initial impact of the Boeing 737 Max grounding.
Like a number of other major airlines, Canada’s biggest carrier said it would remove the Boeing 737 MAX from its schedule until at least January 8, 2020.
The company said the impact of the Boeing 737 MAX grounding would be felt more acutely in its busy summer period.
Air Canada had previously said it was removing all 737 MAX aircraft from its schedule until at least Sept. 2, 2019. To mitigate the impact of its 24 grounded MAX aircraft, Air Canada is extending leases of planes it was planning to phase out of service, and is integrating two additional Airbus jets from now defunct Icelandic carrier WOW.
Air Canada’s traffic rose 3.6% in the second quarter and passenger revenue per available seat mile, a key revenue measure for airlines, increased 3.6%.
Air Canada’s operating expenses rose 8%, and adjusted cost per available seat mile (CASM) – a measure of how much an airline spends to fly a passenger – climbed 5.9%, a result of the impact of the MAX grounding.
The Montreal-based company’s adjusted net income jumped 86% to C$240 million ($182 million), or 88 Canadian cents per share, in the quarter ended June 30.
Analysts on average had estimated a profit of 76 Canadian cents per share, according to IBES data from Refinitiv.
Operating revenue rose to C$4.76 billion from C$4.33 billion.