Air Canada says second-quarter earnings were down from last year in what it characterized as a “challenging environment.” Challenges include an 11% drop in revenue in the airline’s U.S. transborder routes that it attributed to geopolitical tensions and a lower Canadian dollar.
The airline however saw increases in revenue from other areas, including its Atlantic and Latin American routes, as it redirected capacity, said chief executive Michael Rousseau in a statement.
“We have strategically redirected capacity to high-demand markets and captured demand for premium services, leveraging the breadth and strength of our global network,” he said.
Overall, the airline reported a net income of $186 million in the second quarter, down from $410 million in the same quarter last year.
Passenger revenues in the quarter amounted to $5.03 billion, up 1% from last year on a 2.5% capacity growth.
Revenue from its U.S. transborder segment was $961 million, down from $1.08 billion last year, while its Atlantic routes saw $1.64 billion in revenue, up from $1.56 billion last year.
For the first six months of the year, revenue from U.S. flights were down 7.9% and its Pacific routes were down 2.8%, contributing to an overall drop of 0.8% in passenger revenue compared with last year.
Despite the challenges, the airline reaffirmed its financial guidance for the year that it issued in May.
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