Air Canada (TSX:AC.B) shares took flight after the airline posted better-than-expected profits and revenue for the third quarter.
Earnings per share (EPS) of $2.57 were down from $3.41 in the year-ago quarter but more than double the $1.18 expected by analysts.
Operating income was C$1.04 billion, down from C$1.42 billion for the same period in 2023.
Revenue of $6.11 billion, down 4% year-over-year, narrowly beat estimates of $6.10 billion.
CEO Michael Rousseau highlighted the “solid results” amid “added complexity” as the airline negotiated a new contract with its pilots during the quarter.
“We proactively offered options and flexibility to customers, and I am proud that we concluded a mutually beneficial agreement without significant disruption to customers and with a contained revenue impact,” he said.
The company raised its full-year earnings guidance, now expecting adjusted EBITDA of $3.5 billion compared to its earlier forecast of $3.1 billion to $3.4 billion.
It has also narrowed its cost per average seat mile to expect a 2% increase over 2023, versus its earlier forecast of a 2.5% to 3.5% increase, to account for updated expectations about jet fuel prices and the impact of contract-related cost adjustments.
Further, it announced a share buyback program for up to 35.73 million shares, representing about 10% of the public float of its shares.
Rousseau said this program would address “some of the dilution experienced from financing decisions necessary during the pandemic, and returning value to shareholders.”
“This additional step, after paying down our debt and funding our growth, is consistent with our capital allocation roadmap and our strategic plan," the CEO said.
Shares of Air Canada (TSX:AC.B) traded up 10.2% at C$20.80 on Friday morning.