The Farnborough International Airshow, one of the world’s largest aviation trade shows, kicked off yesterday amid some industry turbulence.
What happened: Air Canada announced that it was substantially slashing its projected profits for this year. The airline is facing tougher competition for international travel and an abundance of empty seats as would-be flyers simply aren’t willing to pony up for pricey tix.
- Complications from continued supply chain pressures also put a damper on profit projections. Air Canada shares fell 2.46% for the day.
- It isn’t the only airline flying through cloudy economic skies. United, Delta, Alaska Airlines, and Ryanair all reported lacklustre earnings for the last quarter.
Why it matters: Flying costs markedly more than it did pre-pandemic — the average ticket price for a Canadian airline this June was 19% higher than in June 2019 — after prices rose through the first half of the year. A pile-up of unsold seats could force airlines to slash prices.
What they’re saying: “Demand has been holding up reasonably, but it looks like we’re hitting a wall, and something has to give,” Robert Kokonis, president of air travel consultancy AirTrav, told Open Jaw.—QH