Air Canada reported a 47% drop in quarterly profit as margins were pressured by more competition and softening demand. 

Canada’s largest airline reported revenue of C$5.5 billion ($4 billion) for the second quarter, a 2% rise from the same period in 2023. It earned 98 Canadian cents per share on an adjusted basis, down from C$1.85 a year ago. 

Those numbers aligned with analyst estimates because Air Canada released preliminary results on July 22 that warned of lower profitability. 

The company, which operates flights globally, lowered its full-year financial guidance last month, saying it was suffering from pricing pressures in international markets but still continues to see healthy demand. Airlines across North America have dealt with excess capacity this summer, which resulted in them discounting fares to try to attract cost-conscious consumers to fill those seats. 

Air Canada has trimmed its flight capacity: it sees available seat miles rising as much as 6.5% this year. Prior to the July profit warning, it had said capacity would increase as much as 8%.  

Air Canada shares have declined 19% so far this year through Tuesday’s close.