For the third quarter, Air Canada released the following financial report:
Operating profit of 12.1%, the first positive operating margin in a quarter since the epidemic started
operating income of $5.322 billion, more than twice what it was in the third quarter of 2021.
A $508 million net loss as opposed to a $640 million net loss in the third quarter of 2021
19.9% EBITDA margin* for the third quarter of 2022
On September 30, 2022, there will be over $10 billion in total liquidity.
Today, Air Canada released financial figures for the third quarter of 2022.
“Air Canada’s solid third-quarter results stem from the ongoing restoration of our extensive network, an improved operational performance, our modern and efficient fleet, as well as leading products and services, and an incredible team of employees,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.
“We generated $644 million in operating income with a strong operating margin of 12.1 per cent. This was the first quarter since the pandemic began in which we delivered positive operating income. In addition, we achieved significant improvements in other metrics from a year ago.
Operating revenues more than doubled to $5.3 billion, on a capacity growth of 130 per cent, and EBITDA* increased to over a billion, with a margin of 19.9 per cent. Yields also improved, helping offset higher fuel prices.
Air Canada Cargo is consistently contributing to our results and Aeroplan is continuing to perform extremely well with travel’s return. Our transformed loyalty program’s gross billings from points sold, purchase volume on co-brand cards, and new members are all at record highs.
“Despite the global disruption of air travel, through teamwork and focused efforts, we safely transported nearly 11.5 million customers to their destinations this quarter. We are further encouraged by continuing strong demand, now further stimulated by the easing of COVID-related restrictions.
Advance ticket sales in the quarter were at 95 per cent of third quarter 2019 levels. In the third quarter, our adjusted unit cost or adjusted CASM* improved by 38 per cent to 11.6 cents compared to the same period last year, and we will continue to carefully control costs. We ended the quarter with just over $10.2 billion in total liquidity.
“Thanks to the hard work and commitment of our employees, after a difficult June and July, we saw significant operational improvement throughout August and September, with the operation today now on par with pre pandemic levels. Still, we know many customers experienced disruptions travelling this summer, and we sincerely regret any inconveniences that have occurred.
We would like to thank our customers for their understanding and loyalty and assure them that the lessons of this operationally challenging period are now being applied to build greater resiliency going forward, and to elevate the customer experience overall. Air Canada marked its 85th anniversary this quarter.
We stand on a robust foundation and, with our most recent financial results, investments and strategic plan, are confident we have a bright future in connecting Canada and the world,” said Mr. Rousseau.
The third quarter of 2022 saw the following results according to Air Canada:
From the third quarter of 2021, operating capacity as expressed in Available Seat Miles (ASMs) more than doubled. According to forecasts in Air Canada’s second quarter 2022 earnings announcement, published August 2, 2022, capacity in the third quarter was 79% of the third quarter of 2019.
The third quarter of 2019 had a roughly three-fold increase in passenger revenues, totaling $4.818 billion, or 94% of those from the third quarter of 2021.
In comparison to the third quarter of 2021, operating revenues of $5.322 billion climbed by almost two and a half times.
From the third quarter of 2021, operating expenses were $4.678 billion, an increase of $2.211 billion.
Cost per available seat mile (CASM), which was 22.2 cents in the third quarter of 2021 and 20.8 cents in the second quarter of 2022, dropped to 18.3 cents this quarter.
Cost per available seat mile (Adjusted CASM)* of 11.6 cents, down from the third quarter of 2021’s adjusted CASM of 18.7 cents and the second quarter of 2022’s adjusted CASM of 13.1 cents. Adjusted CASM grew 14.8% as compared to the third quarter of 2019.
The third quarter of 2021 saw the first quarterly operating income since the pandemic started, with operating income of $644 million as opposed to an operating loss of $364 million.
Earnings before interest, taxes, depreciation, and amortization, or EBITDA* (excluding special items), were $1.057 billion, an improvement over the $67 million loss in the third quarter of 2021.
$508 million in losses, or $1.42 per diluted share, as opposed to $640 million in losses in the third quarter of 2021, or $1.79 per diluted share. A $951 million foreign exchange loss was included in the third quarter of 2022’s net loss.
Compared to the third quarter of 2021, net cash flows from operations were $290 million as opposed to $305 million.
* Non-GAAP financial terms, non-GAAP ratios, or supplemental financial measures include EBITDA (excluding special items), EBITDA margin, adjusted pre-tax income (loss), free cash flow, net debt, and adjusted CASM (mentioned in this press release).
Such measurements do not have established definitions, are not recognized as financial statement presentation metrics under GAAP, might not be comparable to comparable metrics reported by other companies, and shouldn’t be used in place of or as a benchmark for GAAP performance.
For information on Air Canada’s non-GAAP financial measures, non-GAAP ratios, and supplemental financial measures, as well as a reconciliation of the non-GAAP financial measures used in this news release to the closest GAAP financial measure, please see the “Non-GAAP Financial Measures” section of this news release.
