Air Canada has revealed what it describes as 'better-than-expected' second-quarter profit in its latest financial results despite other airlines feeling the pinch due to the worldwide grounding of Boeing 737 Max jets.
The airline reported a second-quarter 2019 operating income of $422 million compared to second quarter 2018 operating income of $308 million.Its net income during the period stood at $240 million compared to adjusted net income of $129 million in the second quarter of 2018.
Second-quarter 2019 net income amounted to $343 million, up from the net loss of $102 million experienced in the second quarter of 2018.
Attributing to the increase, the carrier flew more high-paying passengers during the period. However, executives warned that the grounding of the Boeing 737 Max could impact the airlines' third-quarter results.
Air Canada said that it would be removing the Boeing 737 Max aircraft from its schedule until early January 2020.
This move follows the announcement by Southwest Airlines that it would not use any 737 Max jets until early next year following the airlines reveal that the grounding has cost them $175 million.
Air Canada chief executive officer Calin Rovinescu said that the grounding will be “felt more acutely during the busy summer period.”
He added: "I am delighted to report an excellent second quarter, including record operating revenues of $4.75 billion and record liquidity of nearly $7 billion.
"Although our results exceeded expectations, the Boeing 737 MAX grounding negatively impacted EBITDA growth year-over-year. Our management team and all employees involved with this complex issue did an incredible job implementing creative solutions for our fleet, schedule, network and operations to get passengers to their destinations during the quarter."
Looking forward, the airline expects that its capacity will decline by about 2% from a year earlier - Air Canada had expected a capacity increase of about 3%.
Air Canada, which has 24 grounded MAX aircraft, expected to be operating 36 Max jets by the end of June, and 50 planes by mid-2020, the airline said.