Air Canada on Tuesday said it is adding capacity to meet a rebound in spring traffic, after reporting a larger-than-expected quarterly loss.

Carriers are benefitting from a broader revival in travel demand as pandemic-related restrictions ease and COVID-19 cases subside, but face cost pressures.

Canada's largest carriers said it would increase its available seat mile (ASM) capacity for the second quarter by approximately 414 per cent compared with the same three months in 2021. "The year began with weakness brought on by the Omicron variant and travel restrictions," said Air Canada Chief Executive Michael Rousseau in a statement. "However, we quickly rebounded in March with passenger volumes exceeding the strong December levels."

He said passenger ticket sales last month are more than 90% of March 2019 levels, "a leading indicator to much stronger 2022 second and third quarter results."

Air Canada reported a loss of C$974 million ($764.46 million) for the first quarter or C$2.72 per diluted share compared with a loss of C$1.304 billion or C$3.90 per diluted share during the same period in 2021.

Analysts were expecting a loss of C$474.91 million or C$1.49 a share according to estimates from Refinitiv.

Air Canada said in March it plans to increase capacity in 2022 and wants to lure more U.S. passengers traveling abroad.

Canada attracted more than one million travelers during the week of April 11 for the first time since the pandemic, according to government data, driving optimism that a rebound in traffic will gather pace heading into the peak summer holiday season. ($1 = 1.2741 Canadian dollars)

(Reporting by Allison Lampert; Editing by Andrew Heavens)