Passenger counts are up at Canadian airports but the country's aviation sector continues to lose money.
New data from Statistics Canada show that the country's 24 largest carriers reported a 10th consecutive quarterly loss in the three months that ended June 30. Those carriers' combined losses amounted to $574.5 million in the quarter, according to the nation's number cruncher.
Losses are likely to continue into the third quarter of 2022, given that the country's largest airline, Air Canada (TSX:AC), recently announced that it lost $508 million in the quarter that ended Sept. 30.
The good news for airlines is that passenger counts continue to climb toward pre-pandemic levels. The airlines combined to transport 17 million passengers on scheduled and charter flights in the second quarter of 2022. That was almost seven million more than during the first three months of 2022.
While the number of passengers carried was more than six times that recorded in the second quarter of 2021, it was only 74.6 per cent of the number carried in the same quarter pre-pandemic.
Passenger traffic at Vancouver International Airport has recently been at about 86 per cent of where it was pre-pandemic. Reports of passenger traffic at major international airports have been in that same range. The Moodie Davitt Report last week said England's London Heathrow Airport in October served 84 per cent of the number of passengers served in 2019, or 5.9 million passengers.
The bump in passengers helped the country's 24 largest carriers generate $6 billion in revenue in the second quarter of 2022, with about $5 billion of that coming from passengers. Cargo transport generated $606.2 million in that quarter for the airlines.
The problem was that expenses in the quarter that ended in June were significantly higher than they were in 2019.
Wages, salaries and benefits were up 17.6 per cent in the the second quarter of 2022, compared with the same quarter in 2019. Airlines tried to manage that cost hike in part by employing 10.2 per cent fewer workers.
Energy prices were another huge expense. The largest 24 Canadian air carriers spent a combined $2.2 billion on turbo fuel in the second quarter of 2022 – up 30.4 per cent from the same quarter in 2019.
The biggest operating expense for airlines was depreciation and maintenance, which accounted for the largest share of overall costs, at 42.5 per cent in the quarter.