(Reuters) -Air Canada reported a lower second-quarter profit on Wednesday, as excess capacity in certain markets and stiff competition on international routes hurt its pricing power.
North American carriers are struggling to protect their pricing power as a rush to cash in on booming demand for summer travel left them with excess capacity, forcing them to offer discounts to fill seats.
Last month, the carrier cut its full-year core profit forecast citing a lower yield environment and competition in international markets.
Airlines are also facing heightened costs associated with labor and aircraft maintenance.
Air Canada is yet to finalize a new contract with the union representing its pilots, which might come with additional cost pressures for Canada’s largest airline.
The carrier’s profit fell to C$410 million ($298.23 million) or C$1.04 per share, from C$838 million, or C$2.34 per share, a year earlier.
The Canadian carrier’s operating revenue rose 2% to C$5.52 billion in the quarter ended June 30.
($1 = 1.3748 Canadian dollars)
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Maju Samuel)
Comments