- Record full year operating revenues of
$21.833 billion, reflecting
strong demand for air travel
- Full year operating income of $2.279
billion
- 2023 adjusted
EBITDA* of $3.982 billion, at the high-end of guidance
range
- 2023 cash from operating activities of $4.320 billion and free cash flow* of
$2.756 billion
- Leverage ratio* of 1.1 at
December 31, 2023, down from 5.1 at
December 31, 2022
MONTREAL, Feb. 16,
2024 /CNW/ - Air Canada today reported its fourth
quarter and full year 2023 financial results.
"Air Canada produced very
strong results for the fourth quarter and full year 2023,
delivering on its key financial goals and strategic
priorities. For the full year, we had record operating
revenues of $21.8 billion, up 32
per cent from 2022 as demand for air travel remained strong. Annual
operating income was $2.3 billion; a
$2.5 billion improvement from the
previous year. Our adjusted EBITDA was nearly $4 billion; more than twice that of full
year 2022. These results stem from the effective
management, hard work and customer centric approach of
everyone at Air Canada. I thank the entire team for their
dedication as we safely transported more than 46 million
passengers in 2023. The focus on operational improvements was
evident as, even with the growth in traffic and ongoing supply
chain challenges, our key operational metrics and customer
satisfaction improved year over year," said Michael Rousseau, President and Chief Executive
Officer of Air Canada.
"We also took important steps during the year to enable
ourselves to continue performing consistently as we remain
firmly committed to our plan and to enhancing our level of customer
service, improving our operational reliability, strategically
adding to our key hubs and network and growing profitably. We
strengthened our balance sheet, reduced our debt and, despite the
continuing macroeconomic and structural cost pressures on our
industry, our unit costs were contained within our adjusted CASM
guidance. Additionally, we will continue to expand Aeroplan, a key
driver of customer loyalty that has doubled its membership to
eight million members over the last five years.
"Our airline remains adaptable to changing business
conditions, and is poised to take advantage of opportunities,
giving us every confidence for the year ahead. As we look
into the future, we aim to grow, deliver on our financial
objectives and create long-term value for all stakeholders."
*Adjusted CASM,
adjusted EBITDA (earnings before interest, taxes, depreciation, and
amortization), adjusted EBITDA margin, leverage ratio (also
referred to as net debt to trailing 12-month adjusted EBITDA
ratio), net debt, adjusted pre-tax income (loss), adjusted net
income (loss), adjusted earnings (loss) per share, and free cash
flow are referred to in this news release. Such measures are
non-GAAP financial measures, non-GAAP ratios, or supplementary
financial measures, are not recognized measures for financial
statement presentation under GAAP, do not have standardized
meanings, may not be comparable to similar measures presented by
other entities and should not be considered a substitute for or
superior to GAAP results. Refer to the "Non-GAAP Financial
Measures" section of this news release for descriptions of these
measures, and for a reconciliation of Air Canada non-GAAP measures
used in this news release to the most comparable GAAP financial
measure.
|
Fourth Quarter 2023 Financial Results
The following is an overview of Air Canada's results of
operations and financial position for the fourth quarter 2023
compared to the fourth quarter 2022.
- Operating revenues of $5.175
billion increased $495 million
or 11 per cent on an operated capacity growth of over 9 per cent
year over year, close to the guidance provided in Air Canada's news
release dated October 30, 2023.
- Operating expenses of $5.096
billion increased $388 million
or 8 per cent. The increase was due to higher costs in nearly all
line items reflecting higher operated capacity and traffic year
over year, including higher wages, salaries and benefits. The
increase was partially offset by lower aircraft fuel expense on a
jet fuel price decline.
- Operating income of $79 million,
with an operating margin of 1.5 per cent, improved $107 million.
- Adjusted EBITDA of $521 million,
with an adjusted EBITDA margin* of 10.1 per cent, improved
$132 million.
- Net income of $184 million and
diluted earnings per share of $0.41
compared to a net income of $168
million and diluted earnings per share of $0.41.
- Adjusted net loss* of $44 million
and adjusted loss per diluted share of $0.12 compared to an adjusted net loss of
$217 million and adjusted loss per
diluted share of $0.61.
- Adjusted CASM* of 14.25 cents compared to
13.68 cents, an increase
of 4.1 per cent driven by higher salaries, wages and
benefits expenses, higher maintenance costs and
general inflationary pressures on certain line
items.
- Net cash flows from operating activities of $985 million increased $338 million.
- Free cash flow of $669 million
increased $349 million.
Full Year 2023 Financial Results
The following is an overview of Air Canada's results of
operations and financial position for the full year 2023 compared
to the full year 2022.
- Operating revenues of $21.833
billion increased $5.277
billion or 32 per cent on approximately a 20 per cent growth
in operated capacity. The capacity increase was in-line with the
guidance provided in Air Canada's news release dated October 30, 2023.
- Operating expenses of $19.554
billion increased $2.811
billion or 17 per cent. The increase was primarily due to
increases in all line items reflecting higher operated capacity and
traffic year over year, including, higher salaries, wages and
benefits. It also reflects the impact of a favourable maintenance
cost adjustment of $159 million that
was recorded in the first quarter of 2022.
- Operating income of $2.279
billion, with an operating margin of 10.4 per cent, improved
$2.466 billion.
- Adjusted EBITDA of $3.982
billion, with an adjusted EBITDA margin* of 18.2 per cent,
improved $2.525 billion, at the high
end of the guidance provided in Air Canada's news release dated
October 30, 2023.
- Net income of $2.276 billion and
diluted earnings per share of $5.96
compared to a net loss of $1.7
billion and diluted loss per share of $4.75.
- Adjusted net income of $1.713
billion and adjusted earnings per diluted share of
$4.56 compared to an adjusted net
loss of $988 million and an adjusted
loss per diluted share of $2.76.
- Adjusted CASM of 13.49 cents
compared to 13.21 cents in 2022, a
2.2 per cent increase driven by higher traffic and
selling costs correlated to higher revenues, higher labour costs, a
favourable maintenance cost adjustment recorded in 2022, and
inflationary pressure on certain line items. This was within
the guidance range provided in Air Canada's news release dated
October 30, 2023.
- Net cash flows from operating activities of $4.320 billion increased $1.952 billion.
- Free cash flow of $2.756 billion
increased $1.960 billion.
- Net debt to adjusted EBITDA ratio* was 1.1 at December 31, 2023, an improvement from 5.1 as at
December 31, 2022, due to the
increase in adjusted EBITDA and a $2.9
billion reduction in net debt.
Outlook
For the first quarter of 2024, Air Canada plans to increase
its ASM capacity by about 10 per cent from the same quarter in
2023.
Air Canada is providing the
following guidance for the full year 2024, replacing prior
2024 targets:
Metric
|
Full Year
2024 Guidance
|
ASM
capacity
|
6 to 8
per cent increase versus
2023
|
Adjusted
CASM
|
2.5 to 4.5
per cent increase versus 2023
|
Adjusted
EBITDA
|
$3.7 to
$4.2 billion
|
Major Assumptions
Assumptions were made by Air Canada in preparing and making
forward-looking statements. As part of its assumptions, Air Canada
assumes moderate Canadian GDP growth for 2024. Air
Canada also assumes that the
Canadian dollar will trade, on average, at C$1.33 per U.S. dollar for the full year
2024 and that the price of jet fuel will average C$1.00 per litre for the full year
2024.
Non-GAAP Financial Measures
Below is a description of certain non-GAAP financial measures
and ratios used by Air Canada to provide readers with additional
information on its financial and operating performance. Such
measures are not recognized measures for financial statement
presentation under GAAP, do not have standardized meanings, may not
be comparable to similar measures presented by other entities and
should not be considered a substitute for or superior to GAAP
results.
Adjusted CASM
Air Canada uses adjusted CASM
to assess the operating and cost performance of its ongoing airline
business without the effects of aircraft fuel expense, the cost of
ground packages at Air Canada Vacations, impairment of assets and
freighter costs as these items may distort the analysis of certain
business trends and render comparative analysis across periods less
meaningful and their exclusion generally allows for a more
meaningful analysis of Air Canada's operating expense performance
and a more meaningful comparison to that of other airlines.
In calculating adjusted CASM, aircraft fuel expense is excluded
from operating expense results as it fluctuates widely depending on
many factors, including international market conditions,
geopolitical events, jet fuel refining costs and Canada/U.S. currency exchange rates. Air
Canada also incurs expenses
related to ground packages at Air Canada Vacations, which some
airlines, without comparable tour operator businesses, may not
incur. In addition, these costs do not generate ASMs and therefore
excluding these costs from operating expense results provides for a
more meaningful comparison across periods when such costs may
vary.
Air Canada also incurs expenses
related to the operation of freighter aircraft, which some
airlines, without comparable cargo businesses, may not incur. Air
Canada had seven Boeing 767
dedicated freighter aircraft in its operating fleet as at
December 31, 2023, compared to three
Boeing 767 dedicated freighter aircraft in service as at
December 31, 2022. These costs do not
generate ASMs and therefore excluding these costs from operating
expense results provides for a more meaningful comparison of the
passenger airline business across periods.
Adjusted CASM is reconciled to GAAP operating expense as
follows:
(Canadian dollars in
millions, except where indicated)
|
Fourth Quarter
|
Full
Year
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
Operating expense –
GAAP
|
$
|
5,096
|
$
|
4,708
|
$
|
388
|
$
|
19,554
|
$
|
16,743
|
$
|
2,811
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft
fuel
|
|
(1,391)
|
|
(1,459)
|
|
68
|
|
(5,318)
|
|
(5,276)
|
|
(42)
|
Ground package
costs
|
|
(177)
|
|
(163)
|
|
(14)
|
|
(720)
|
|
(474)
|
|
(246)
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(4)
|
|
4
|
Freighter costs
(excluding fuel)
|
|
(46)
|
|
(27)
|
|
(19)
|
|
(157)
|
|
(86)
|
|
(71)
|
Operating expense,
adjusted for the
above-noted items
|
$
|
3,482
|
$
|
3,059
|
$
|
423
|
|
13,359
|
|
10,903
|
|
2,456
|
ASMs
(millions)
|
|
24,439
|
|
22,368
|
|
9.3 %
|
|
99,012
|
|
82,558
|
|
19.9 %
|
Adjusted CASM
(cents)
|
¢
|
14.25
|
¢
|
13.68
|
¢
|
0.57
|
¢
|
13.49
|
¢
|
13.21
|
¢
|
0.28
|
EBITDA and Adjusted EBITDA
EBITDA (earnings before interest, taxes, depreciation and
amortization) is commonly used in the airline industry and is used
by Air Canada as a means to view operating results before interest,
taxes, depreciation and amortization as these costs can vary
significantly among airlines due to differences in the way airlines
finance their aircraft and other assets. In adjusted EBITDA, Air
Canada excludes the effect of impairment of assets as it may
distort the analysis of certain business trends and render
comparative analysis across periods or to other airlines less
meaningful.
Adjusted EBITDA Margin
Adjusted EBITDA margin (adjusted EBITDA as a percentage of
operating revenues) is commonly used in the airline industry and is
used by Air Canada as a means to measure the operating margin
before interest, taxes, depreciation and amortization as these
costs can vary significantly among airlines due to differences in
the way airlines finance their aircraft and other assets. Further,
the effects of impairment of assets are also removed in computing
adjusted EBITDA margin as it may distort the analysis of certain
business trends and render comparative analysis across periods or
to other airlines less meaningful.
EBITDA, adjusted EBITDA and adjusted EBITDA margin are
reconciled to GAAP operating income (loss) as follows:
|
Fourth Quarter
|
Full
Year
|
(Canadian dollars in
millions, except where
indicated)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
Operating loss –
GAAP
|
$
|
79
|
$
|
(28)
|
$
|
107
|
$
|
2,279
|
$
|
(187)
|
$
|
2,466
|
Add
back:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
442
|
|
417
|
|
25
|
|
1,703
|
|
1,640
|
|
63
|
EBITDA
|
$
|
521
|
$
|
389
|
$
|
132
|
$
|
3,982
|
$
|
1,453
|
$
|
2,529
|
Remove:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
4
|
|
(4)
|
Adjusted
EBITDA
|
$
|
521
|
$
|
389
|
$
|
132
|
$
|
3,982
|
$
|
1,457
|
$
|
2,525
|
Operating
revenues
|
$
|
5,175
|
$
|
4,680
|
$
|
495
|
$
|
21,833
|
$
|
16,556
|
$
|
5,277
|
Operating margin
(%)
|
|
1.5
|
|
(0.6)
|
|
2.1 pp
|
|
10.4
|
|
(1.1)
|
|
11.5
pp
|
Adjusted EBITDA
margin (%)
|
|
10.1
|
|
8.3
|
|
1.8
pp
|
|
18.2
|
|
8.8
|
|
9.4 pp
|
Adjusted Pre-tax Income (Loss)
Adjusted pre-tax income (loss) is used by Air Canada to assess
the overall pre-tax financial performance of its business without
the effects of impairment of assets, foreign exchange gains or
losses, net interest relating to employee benefits, gains or losses
on financial instruments recorded at fair value, gains or losses on
sale and leaseback of assets, gains or losses on disposal of
assets, gains or losses on debt settlements and modifications, as
these items may distort the analysis of certain business trends and
render comparative analysis across periods or to other airlines
less meaningful.
Adjusted pre-tax income (loss) is reconciled to GAAP income
(loss) before income taxes as follows:
(Canadian dollars in
millions)
|
Fourth Quarter
|
Full
Year
|
2023
|
2022
|
$
Change
|
2023
|
2022
|
$
Change
|
Income (loss) before
income taxes –
GAAP
|
$
|
122
|
$
|
146
|
$
|
(24)
|
$
|
2,212
|
$
|
(1,524)
|
$
|
3,736
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
4
|
|
(4)
|
Foreign exchange (gain)
loss
|
|
(72)
|
|
(316)
|
|
244
|
|
(389)
|
|
732
|
|
(1,121)
|
Net interest relating
to employee benefits
|
|
(7)
|
|
(7)
|
|
-
|
|
(25)
|
|
(24)
|
|
(1)
|
Gain on financial
instruments recorded at
fair value
|
|
(91)
|
|
(44)
|
|
(47)
|
|
(115)
|
|
(133)
|
|
18
|
Loss
on debt settlements and modifications
|
|
1
|
|
31
|
|
(30)
|
|
10
|
|
14
|
|
(4)
|
Gain on disposal of
assets
|
|
-
|
|
(21)
|
|
21
|
|
-
|
|
(21)
|
|
21
|
Adjusted pre-tax
income (loss)
|
$
|
(47)
|
$
|
(211)
|
$
|
164
|
$
|
1,693
|
$
|
(952)
|
$
|
2,645
|
Adjusted Net Income (Loss) and Adjusted Earnings (Loss) per
Share – Diluted
Air Canada uses adjusted net
income (loss) and adjusted earnings (loss) per share – diluted as a
means to assess the overall financial performance of its business
without the after-tax effects of impairment of assets, foreign
exchange gains or losses, net financing expense relating to
employee benefits, gains or losses on financial instruments
recorded at fair value, gains or losses on sale and leaseback of
assets, gains or losses on debt settlements and modifications,
gains or losses on disposal of assets as these items may distort
the analysis of certain business trends and render comparative
analysis to other airlines less meaningful.
Adjusted net income (loss) and adjusted earnings (loss) per
share are reconciled to GAAP net income as follows:
(Canadian dollars in
millions)
|
Fourth Quarter
|
Full
Year
|
2023
|
2022
|
$
Change
|
2023
|
2022
|
$
Change
|
Net income (loss) –
GAAP
|
$
|
184
|
$
|
168
|
$
|
16
|
$
|
2,276
|
$
|
(1,700)
|
$
|
3,976
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
4
|
|
(4)
|
Foreign exchange (gain)
loss
|
|
(72)
|
|
(316)
|
|
244
|
|
(389)
|
|
732
|
|
(1,121)
|
Net interest relating
to employee benefits
|
|
(7)
|
|
(7)
|
|
-
|
|
(25)
|
|
(24)
|
|
(1)
|
Gain on financial
instruments recorded at
fair value
|
|
(91)
|
|
(44)
|
|
(47)
|
|
(115)
|
|
(133)
|
|
18
|
Loss
on debt settlements and modifications
|
|
1
|
|
31
|
|
(30)
|
|
10
|
|
14
|
|
(4)
|
Gain on disposal of
assets
|
|
-
|
|
(21)
|
|
21
|
|
-
|
|
(21)
|
|
21
|
Income tax, including
for above reconciling
items (1)
|
|
(59)
|
|
(28)
|
|
(31)
|
|
(44)
|
|
140
|
|
(184)
|
Adjusted net income
(loss)
|
$
|
(44)
|
$
|
(217)
|
$
|
173
|
$
|
1,713
|
$
|
(988)
|
$
|
2,701
|
Weighted average number
of outstanding
shares used in computing diluted income
per share (in millions)
|
|
358
|
|
358
|
|
-
|
|
376
|
|
358
|
|
18
|
Adjusted loss per
share – diluted
|
$
|
(0.12)
|
$
|
(0.61)
|
$
|
0.49
|
$
|
4.56
|
$
|
(2.76)
|
$
|
7.32
|
(1)
|
In 2023, the
deferred income tax expense recorded in other comprehensive income
related to remeasurements on employee benefit liabilities is offset
by a deferred income tax recovery, which was recorded through Air
Canada's consolidated statement of operations. This recovery is
removed from adjusted net income for the year 2023. In comparison,
a deferred income tax expense was removed from adjusted net loss
for the year 2022.
|
Free Cash Flow
Air Canada uses free cash
flow as an indicator of the financial strength and performance of
its business, indicating the amount of cash Air
Canada can generate from operations and after
capital expenditures. Free cash flow is calculated as net cash
flows from operating activities minus additions to property,
equipment, and intangible assets, and is net of proceeds from sale
and leaseback transactions.
The table below reconciles free cash flow to net cash flows from
(used in) operating activities for the periods
indicated.
|
Fourth Quarter
|
Full
Year
|
(Canadian dollars in
millions)
|
2023
|
2022
|
$
Change
|
2023
|
2022
|
$
Change
|
Net cash flows from
operating activities
|
$
|
985
|
$
|
647
|
$
|
338
|
$
|
4,320
|
$
|
2,368
|
$
|
1,952
|
Additions to property,
equipment, and
intangible assets
|
|
(316)
|
|
(327)
|
|
11
|
|
(1,564)
|
|
(1,572)
|
|
8
|
Free cash
flow
|
$
|
669
|
$
|
320
|
$
|
349
|
$
|
2,756
|
$
|
796
|
$
|
1,960
|
Net Debt
Net debt is a capital management measure and a key component of
the capital managed by Air Canada and provides management with a
measure of its net indebtedness. It refers to total long-term debt
and lease liabilities (including current portion) less cash, cash
equivalents and short- and long-term investments.
Net Debt to Trailing 12-Month Adjusted EBITDA (Leverage
Ratio)
Net debt to trailing 12-month adjusted EBITDA ratio (also
referred to as "leverage ratio") is commonly used in the airline
industry and is used by Air Canada as a means to measure financial
leverage. Leverage ratio is calculated by dividing net debt by
trailing 12-month adjusted EBITDA.
(Canadian dollars in
millions)
|
December
31, 2023
|
December 31,
2022
|
Change
|
Total long-term debt
and lease liabilities
|
$
|
12,996
|
$
|
15,043
|
$
|
(2,047)
|
Current portion of
long-term debt and lease liabilities
|
|
866
|
|
1,263
|
|
(397)
|
Total long-term debt
and lease liabilities (including current
portion)
|
|
13,862
|
|
16,306
|
|
(2,444)
|
Less cash, cash
equivalents and short and long-term
investments
|
|
(9,295)
|
|
(8,811)
|
|
(484)
|
Net
debt
|
$
|
4,567
|
$
|
7,495
|
$
|
(2,928)
|
Adjusted EBITDA
(trailing 12 months)
|
$
|
3,982
|
|
1,457
|
|
2,525
|
Net debt to adjusted
EBITDA ratio
|
|
1.1
|
|
5.1
|
|
(4.0)
|
For further information on Air Canada's public disclosure file,
including Air Canada's 2022 Annual Information Form dated
February 25, 2023, consult SEDAR+ at
www.sedarplus.com.
Fourth Quarter and Full Year 2023 Conference Call
Air Canada will host its
quarterly analysts' call today, Friday,
February 16, 2024, at 8:00 a.m.
ET. Michael Rousseau,
President and Chief Executive Officer, John
Di Bert, Executive Vice President and Chief Financial
Officer, and Mark Galardo, Executive
Vice President, Revenue and Network Planning, will present the
results and be available for analysts' questions. Immediately
following the analysts' Q&A session, Mr. Di Bert and Pierre
Houle, Vice President and Treasurer, will be available to
answer questions from term loan B lenders and holders of Air Canada
bonds.
Media and the public may access this call on a listen-in basis.
Details are as follows:
Live audio
webcast:
|
https://edge.media-server.com/mmc/p/8ini6iaf
|
By telephone:
|
1-800-715-9871
(toll-free), Conference ID 6697341
|
|
Please allow 10 minutes
to be connected to the conference call.
|
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This news release includes forward-looking statements
within the meaning of applicable securities laws. Forward-looking
statements relate to analyses and other information that are based
on forecasts of future results and estimates of amounts not yet
determinable. These statements may involve, but are not limited to,
comments relating to guidance, strategies, expectations, planned
operations or future actions. Forward-looking statements are
identified using terms and phrases such as "preliminary",
"anticipate", "believe", "could", "estimate", "expect", "intend",
"may", "plan", "predict", "project", "will", "would", and similar
terms and phrases, including references to assumptions.
Forward-looking statements, by their nature, are based on
assumptions including those described herein and are subject to
important risks and uncertainties. Forward-looking statements
cannot be relied upon due to, among other things, changing external
events and general uncertainties of the business of Air Canada.
Actual results may differ materially from results indicated in
forward-looking statements due to a number of factors, including
those discussed below.
Factors that may cause results to differ materially from
results indicated in forward-looking statements include economic
conditions as well as geopolitical conditions such as the military
conflicts in the Middle East and
between Russia and Ukraine, Air Canada's ability to successfully
achieve or sustain positive net profitability, industry and market
conditions and the demand environment, competition, Air Canada's
dependence on technology, cybersecurity risks, interruptions of
service, climate change and environmental factors (including
weather systems and other natural phenomena and factors arising
from anthropogenic sources), Air Canada's dependence on key
suppliers (including government agencies and other stakeholders
supporting airport and airline operations), employee and labour
relations and costs, Air Canada's ability to successfully implement
appropriate strategic and other important initiatives (including
Air Canada's ability to manage operating costs), energy prices, Air
Canada's ability to pay its indebtedness and maintain or increase
liquidity, Air Canada's dependence on regional and other carriers,
Air Canada's ability to attract and retain required personnel,
epidemic diseases, changes in laws, regulatory developments or
proceedings, terrorist acts, war, Air Canada's ability to
successfully operate its loyalty program, casualty losses, Air
Canada's dependence on Star Alliance® and joint ventures, Air
Canada's ability to preserve and grow its brand, pending and future
litigation and actions by third parties, currency exchange
fluctuations, limitations due to restrictive covenants, insurance
issues and costs, and pension plan obligations as well as the
factors identified in Air Canada's public disclosure file available
at www.sedarplus.com and, in particular, those
identified in section 18 "Risk Factors" of Air Canada's 2023
MD&A dated February 16,
2024.
The forward-looking statements contained or incorporated by
reference in this news release represent Air Canada's expectations
as of the date of this news release (or as of the date they are
otherwise stated to be made) and are subject to change after such
date. However, Air Canada disclaims any intention or obligation to
update or revise any forward-looking statements whether because of
new information, future events or otherwise, except as required
under applicable securities regulations.
About Air Canada
Air Canada is Canada's largest airline, the country's flag
carrier and a founding member of Star
Alliance, the world's most comprehensive air transportation
network. Air Canada provides
scheduled service directly to more than 180 airports in
Canada, the United States and Internationally on six
continents. It holds a Four-Star ranking from Skytrax. Air
Canada's Aeroplan program is
Canada's premier travel loyalty
program, where members can earn or redeem points on the world's
largest airline partner network of 45 airlines, plus through an
extensive range of merchandise, hotel and car rental partners. Its
freight division, Air Canada Cargo, provides air freight lift and
connectivity to hundreds of destinations across six continents
using Air Canada's passenger and freighter aircraft. Air
Canada aims to achieve an ambitious net zero emissions goal from
all global operations by 2050. Air Canada shares are publicly
traded on the TSX in Canada and
the OTCQX in the US.
Internet: aircanada.com/media
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Selected Financial Metrics and Statistics
The financial and operating highlights for Air Canada for the
periods indicated are as follows:
(Canadian dollars in
millions, except per share data or where indicated)
|
Fourth Quarter
|
Full
Year
|
Financial
Performance Metrics
|
2023
|
2022
|
$
Change
|
2023
|
2022
|
$
Change
|
Operating
revenues
|
5,175
|
4,680
|
495
|
21,833
|
16,556
|
5,277
|
Operating
income (loss)
|
79
|
(28)
|
107
|
2,279
|
(187)
|
2,466
|
Operating margin
(1) (%)
|
1.5
|
(0.6)
|
2.1 pp
(8)
|
10.4
|
(1.1)
|
11.5 pp
|
Adjusted EBITDA
(2)
|
521
|
389
|
132
|
3,982
|
1,457
|
2,525
|
Adjusted EBITDA margin
(2) (%)
|
10.1
|
8.3
|
1.8 pp
|
18.2
|
8.8
|
9.4 pp
|
Income
(loss) before income taxes
|
122
|
146
|
(24)
|
2,212
|
(1,524)
|
3,736
|
Net income
(loss)
|
184
|
168
|
16
|
2,276
|
(1,700)
|
3,976
|
Adjusted pre-tax income
(loss) (2)
|
(47)
|
(211)
|
164
|
1,693
|
(952)
|
2,645
|
Adjusted net income
(loss) (2)
|
(44)
|
(217)
|
173
|
1,713
|
(988)
|
2,701
|
Total liquidity
(3)
|
10,290
|
9,824
|
466
|
10,290
|
9,824
|
466
|
Net cash flows from
operating activities
|
985
|
647
|
338
|
4,320
|
2,368
|
1,952
|
Free cash flow
(2)
|
669
|
320
|
349
|
2,756
|
796
|
1,960
|
Net debt
(2)
|
4,567
|
7,495
|
(2,928)
|
4,567
|
7,495
|
(2,928)
|
Diluted earnings (loss)
per share
|
0.41
|
0.41
|
-
|
5.96
|
(4.75)
|
10.71
|
Adjusted earnings
(loss) per share (2)
|
(0.12)
|
(0.61)
|
0.49
|
4.56
|
(2.76)
|
7.32
|
Operating Statistics
(4)
|
2023
|
2022
|
Change
%
|
2023
|
2022
|
Change
%
|
Revenue passenger miles
(RPMs) (millions)
|
20,405
|
18,525
|
10.1
|
85,802
|
66,495
|
29.0
|
Available seat miles
(ASMs) (millions)
|
24,439
|
22,368
|
9.3
|
99,012
|
82,558
|
19.9
|
Passenger load factor
%
|
83.5 %
|
82.8 %
|
0.7 pp
|
86.7 %
|
80.5 %
|
6.1 pp
|
Passenger revenue per
RPM (Yield) (cents)
|
22.3
|
21.9
|
1.8
|
22.6
|
21.4
|
6.0
|
Passenger revenue per
ASM (PRASM) (cents)
|
18.6
|
18.2
|
2.6
|
19.6
|
17.2
|
13.6
|
Operating revenue per
ASM (cents)
|
21.2
|
20.9
|
1.2
|
22.1
|
20.1
|
10.0
|
Operating expense per
ASM (CASM) (cents)
|
20.9
|
21.1
|
(0.9)
|
19.8
|
20.3
|
(2.6)
|
Adjusted CASM (cents)
(2)
|
14.2
|
13.7
|
4.1
|
13.5
|
13.2
|
2.2
|
Average number of
full-time-equivalent (FTE)
employees (thousands) (5)
|
36.4
|
33.2
|
9.7
|
35.7
|
30.5
|
17.1
|
Aircraft in operating
fleet at period-end
|
361
|
345
|
5
|
361
|
345
|
5
|
Seats dispatched
(thousands)
|
13,636
|
12,690
|
7.4
|
54,026
|
47,038
|
14.9
|
Aircraft frequencies
(thousands)
|
93.4
|
89.9
|
3.9
|
373.1
|
340.5
|
9.6
|
Average stage length
(miles) (6)
|
1,792
|
1,763
|
1.7
|
1,833
|
1,755
|
4.4
|
Fuel cost per litre
(cents)
|
117.6
|
134.3
|
(12.4)
|
111.6
|
130.1
|
(14.2)
|
Fuel litres
(thousands)
|
1,178,926
|
1,084,569
|
8.7
|
4,751,692
|
4,056,788
|
17.1
|
Revenue passengers
carried (thousands) (7)
|
10,899
|
10,098
|
7.9
|
44,790
|
36,144
|
23.9
|
(1)
|
Operating margin is
a supplementary financial measure and is defined as operating
income (loss) as a percentage of operating revenues.
|
(2)
|
Adjusted EBITDA
(earnings before interest, taxes, depreciation, and amortization),
adjusted EBITDA margin, adjusted pre-tax income (loss), adjusted
net income (loss), free cash flow, net debt, adjusted earnings
(loss) per share, and adjusted CASM are non-GAAP financial
measures, capital management measures, non-GAAP ratios or
supplementary financial measures. Such measures are not recognized
measures for financial statement presentation under GAAP, do not
have standardized meanings, may not be comparable to similar
measures presented by other entities and should not be considered a
substitute for or superior to GAAP results. Refer to section
20 "Non-GAAP Financial Measures" of this
MD&A for descriptions of Air Canada's non-GAAP
financial measures and for a quantitative reconciliation of Air
Canada's non-GAAP financial measures to the most comparable GAAP
measure.
|
(3)
|
Total liquidity
refers to the sum of cash, cash equivalents, short and long-term
investments, and the amounts available under Air
Canada's credit facilities. Total liquidity, as at December
31, 2023, of $10,290 million consisted of
$9,295 million in cash, cash equivalents, short
and long-term investments and $995 million
available under undrawn credit facilities. As at December
31, 2022, total liquidity of $9,824 million consisted
of $8,811 million in cash and cash equivalents, short
and long-term investments, and $1,013 million
available under undrawn credit facilities. These
amounts also include funds
($393 million as at December 31,
2023 and $386 million as at December
31, 2022) held in trust by Air Canada Vacations in
accordance with regulatory requirements governing advance sales for
tour operators.
|
(4)
|
Except for the
reference to average number of FTE employees, operating statistics
in this table include third party
carriers operating under capacity purchase
agreements with Air Canada.
|
(5)
|
Reflects FTE
employees at Air Canada and its subsidiaries. Excludes FTE
employees at third party carriers operating
under capacity purchase agreements with Air Canada.
|
(6)
|
Average stage length
is calculated by dividing the total number of available seat miles
by the total number of seats dispatched.
|
(7)
|
Revenue passengers
are counted on a flight number basis (rather than by
journey/itinerary or by leg), which is consistent with the IATA
definition of revenue passengers carried.
|
(8)
|
"pp" denotes
percentage points and refers to a measure of the arithmetic
difference between two percentages.
|
SOURCE Air Canada