(Reuters) -Air Canada on Thursday raised its full-year forecast for core profit, citing a stronger-than-anticipated demand environment and lower-than-expected fuel costs.
Shares of Canada’s largest carrier rose 10% on Friday.
Easing restrictions spurred international travel demand, helping carriers to mitigate cost pressures even as rising inflation is making leisure activities more expensive.
Despite a looming recession, major North American carriers remain confident of filling up seats on planes due to a constrained capacity and a shift in consumer expenditure to services from goods.
Air Canada said on Thursday it expects 2023 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) at about $3.5 – $4.0 billion, up from prior outlook of about $2.5 – $3.0 billion.
The carrier added it expects its 2023 capacity to increase by about 23% from a year earlier to hit 90% of pre-pandemic levels, but down from 24% forecast earlier.
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Airlines are having to temper their capacity expectations for the year due to delivery delays from planemakers Boeing Co and Airbus SE.
(Reporting by Aishwarya Nair in Bengaluru; Editing by Shailesh Kuber and Krishna Chandra Eluri)