Air Canada believes it can return to 2019 capacity levels by 2023, sooner than it previously forecast, citing encouraging trends since Canada’s borders reopened to vaccinated travelers in September.

“Obviously, there is no textbook on this type of recovery,” CEO Michael Rousseau told analysts Nov. 2. “There is no doubt we are very encouraged by what we see. And there is no doubt that the length of recovery has moved in from the consensus of 2025 to at least 2024 and maybe 2023 … So, we believe that we can get almost all the way back to 2019 capacity by 2023.”

Air Canada painted a mixed COVID-19 recovery picture, pointing to strength on domestic routes, transborder routes to the US and transatlantic routes. But transpacific routes continue to lag and are expected to take longer to recover. Leisure and VFR demand is leading the recovery with business demand still weak, Air Canada said.

“As evidenced by the steep ramp up in demand [in the third quarter], our recovery is most decisively underway,” said Lucie Guillemette, Air Canada’s executive VP and chief commercial officer. “We are witnessing a strong rebound in VFR, and leisure traffic remains strong, specifically within North America, across the Atlantic and to sun destinations. In contrast, the recovery over the Pacific is lagging given ongoing border closures and strict restrictions still in place in many countries we fly to.”

She added that weakness in Asian markets “can be offset with opportunities in other geographies.” Guillemette said the overall demand has rebounded “faster than expected … driving optimistic expectations for 2022. We continue to believe that we will see a significant rebound in business travel in 2022.”

Domestic capacity for the month of September was down around 34% versus September 2019 domestic capacity.

Guillemette said there is “uncertainty over when we will return to normal capacity levels in markets such as China and Hong Kong,” adding: “You can offset the slower Asia ramp up with profitable and exciting alternatives in India, the Middle East, South America and Africa.”

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