Air Canada Strives for More Offpeak Success

The second quarter reports of major airlines are in, highlighting Copa, Thai Airways, Philippine Airlines, and IndiGo with remarkable operating margins above 20%, leading in profitability. Notably, Copa’s success is expected given its track record, while IndiGo benefits from a competitive landscape and India’s growing market. Surprisingly, Thai Airways and Philippine Airlines thrive outside peak season in Southeast Asia due to heightened passenger demand revival across East Asia, especially for longhaul and premium flights. This trend extends to Cathay Pacific, profiting from limited flights between China and the world. Tokyo and Seoul also reap rewards, with increased flight frequencies agreed upon by the US and China.

Turkish Airlines and Air Canada, Star Alliance members with seasonal weaknesses, are diversifying away from spring and summer dependence. Turkish Airlines shows success year-round, while Air Canada’s performance in colder seasons remains to be seen. Global Business Travel Group’s comments suggest a normalization of growth rates in the travel industry, driven by receding pandemic impacts and pent-up leisure demand. Airlines confirm sustained healthy travel demand, though some short-haul US leisure markets show signs of cooling. The concern shifts to rising fuel prices rather than demand. Recent developments include Air India’s rebranding, Etihad’s plans for a Red Sox game trip to Boston, American Airlines’ JetBlue transition, and Cathay Pacific’s new narrowbody orders.