Air Canada reported a better than expected quarterly profit on Friday (Aug 11) compared with a year-ago loss and is adding capacity as the country’s largest airline cashes in on strong international travel demand.

A rush by North American travellers to make up for lost time during the pandemic has bolstered earnings for legacy carriers, with international destinations enjoying especially high demand.

Montreal-based Air Canada said it expects to grow available seat mile capacity by about 11 per cent in the third quarter compared with a year earlier.

North American carriers are facing pressure from higher labour costs, with pilots commanding steep pay increases in new contracts. Air Canada reported some relief in a 31.4 per cent decrease in jet fuel prices during the second quarter.

For the quarter ended June 30, Air Canada reported adjusted net income of C$664 million (S$666.33 million), or C$1.85 per diluted share.

Analysts on average had expected adjusted net income of C$289.8 million or 68 Canadian cents a share according to data from Refinitiv.

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For 2023, the carrier is now expecting costs per available seat mile (CASM) of about 0.5 per cent to 1.5 per cent above 2022 levels. In May, Air Canada said it expected CASM of about 0.5 per cent to 2.5 per cent below 2022 levels.

The company’s quarterly operating revenue rose 36 per cent to C$5.43 billion. Analysts on average were expecting revenues of C$5.1 billion, according to Refinitiv data. REUTERS