Photo: The Canadian Press

MONTREAL — Air Canada’s comeback from pandemic shutdowns appears to be gaining momentum after the airline posted a profit in its latest quarter, offering hope the industry has turned a corner even as the country’s largest airline posted a $1.7 billion loss for the year.

The company reported a $168 million profit for the three months ending Dec. 31, as passenger and operating revenues recovered to record highs.

The period included the turbulent Christmas travel season that culminated in a continent-wide storm that caused “four-foot icicles” on some aircraft, an airline executive said during a call with analysts on Friday.

“Weather events were more extreme than usual, even for Canada,” Air Canada’s chief operations officer Craig Landry said. “It also coincided with some of the highest peak travel dates of the holiday season.”

Extreme cold in Calgary made de-icing activities unsafe, baggage handling systems in Toronto froze, giant icicles formed on aircraft and bridges in Vancouver, and heavy snowfall affected takeoff and landing times across the country, he said.

“As flights take progressive delays due to weather, this can cause our crews to exceed their maximum duty days,” Landry said. “It can lead to unplanned flight cancellations.”

Despite the challenging winter conditions, the Montreal-based airline’s fourth-quarter profit amounted to 41 cents per diluted share, compared with a loss of $493 million or $1.38 in the same period during 2021.

Overall, Air Canada still posted a $1.7 billion loss for the year amid a rocky recovery from COVID-19 restrictions and a chaotic summer travel season marked by delays and cancellations as airports, border services and airlines struggled to cope with a surge in passengers.

But its strong fourth quarter helped brighten the outlook for 2023 and has the leadership of the country’s largest airline charting a turnaround.

Indeed, Air Canada announced plans to boost capacity this year.

The company said it plans to increase its so-called available seat miles—an aviation term that refers to an airline’s carrying capacity and ability to generate revenues—by about 50% in the first quarter of 2023 compared with the same period last year.

For 2024, Air Canada said it expects its capacity to reach 2019 levels—a target that signals a complete post-pandemic recovery for the airline.