Air Canada, the Canadian airline, has revised its expectations for capacity growth in 2023. Instead of a previously anticipated 23% increase, the company now expects available seat miles to only be up by 21% compared to 2022 levels.
Additionally, Air Canada forecasts an adjusted cost per available seat mile to be around 0.5% to 1.5% higher than 2022 levels. Previously, the expectation was for costs to be 0.5% to 2.5% lower than the previous year.
However, the airline has raised its outlook for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). It now projects earnings to be between C3.75 billion Canadian dollars (USD $2.79 billion) and C$4 billion. The upward adjustment is attributed to anticipated traffic and yield, as well as a strong demand environment.
The lower end of the guidance for adjusted EBITDA was previously set at C$3.5 billion.
Air Canada has based these projections on assumptions of moderate Canadian GDP growth in 2023, a stable Canadian dollar-to-U.S. dollar exchange rate, and an average jet fuel price of approximately C$1.08 per liter.
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