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Air Canada reports fourth quarter and full year 2021 financial results

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Air Canada released its financial results for the fourth quarter and full-year 2021 today.

Operating revenues of $2.731 billion in the fourth quarter of 2021, up 30% from the third quarter of 2021 and more than three times those of the fourth quarter of 2020

Operating loss of $503 million in the fourth quarter of 2021, compared to $1.003 billion in the fourth quarter of 2020.

EBITDA(1) (earnings before interest, taxes, depreciation, and amortization)(1) of $22 million in the fourth quarter of 2021, excluding special items, compared to negative EBITDA (excluding special items) of $728 million in the same quarter of 2020.

Operating revenues of $6.400 billion for the full year 2021, compared to $5.833 billion for the full year 2020.

In 2021, cargo revenues will reach a new high of $1.495 billion, compared to $920 million in 2020.

Operating deficit of $3.049 billion in the fiscal year 2021, compared to $3.776 billion in the fiscal year 2020.

Negative EBITDA (excluding exceptional items) of $1.464 billion for the whole year 2021, compared to negative EBITDA (excluding special items) of $2.043 billion for the full year 2020.

On December 31, 2021, unrestricted liquidity was $10.4 billion, virtually unchanged from September 30, 2021, excluding monies made available under the financial package with the Government of Canada on September 30, 2021.

“The unpredictable course of COVID-19 made 2021 extremely challenging for Air Canada and the global airline industry. But the sequential and year-over-year improvement in Air Canada’s fourth-quarter results shows the underlying recovery remains intact despite the Omicron variant. Our progress rebuilding our airline is due to the hard work, resourcefulness, and commitment of our people.

I warmly thank our employees for their dedication and professionalism, which have been unwavering through nearly two years of a global pandemic. I also thank our customers, including shippers, for their steadfast loyalty in continuing to choose Air Canada.

As restrictions lift and more people return to flying with us, they will discover measures introduced for COVID safety have been adapted to smooth their journey. As we look at our renewed commitment to customer service excellence, we have more exciting initiatives to come,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

“Our quarterly EBITDA exceeded our expectations and turned positive for the first time in seven quarters, cash flow from operations remained positive and accelerated from the third quarter, and we ended the year with $10.4 billion in unrestricted liquidity, an increase of $2.3 billion, or about 29 percent from the start of the year.

We grew our capacity 26 percent from the previous quarter while continuing to successfully manage load factors and yields in the right direction. Prior to Omicron’s onset, ticket sales reached 65 percent of pre-pandemic levels in October and November. These are all encouraging indicators.

“Moreover, robust advance ticket sales, which grew almost $400 million in the quarter, give us confidence that our customers will keep returning and that Omicron’s effect on our business is travel deferred, not canceled.

Our other lines of business thrived throughout the year, Air Canada Cargo’s record annual revenue of nearly $1.5 billion exceeded $1 billion for the first time, reaching $490 million in the fourth quarter of 2021, our transformed Aeroplan program reported strong billings, and Air Canada Vacations bookings sharply rebounded.

“There are other unmistakable signs of revival. We have been actively restoring our network, with 118 stations served at the end of 2021 up from 70 at its start, and the average number of daily flights rising to 665 in December 2021 from 245 in January 2021.

We have been advancing ESG initiatives, including those related to the environment and diversity. And, most importantly, we have recalled over 10,000 colleagues, including 3,900 in the fourth quarter, and we have also begun hiring new employees. As we move into 2022, all expectations are that the recovery in air travel will continue, albeit unevenly.

Nonetheless, we believe the regeneration of our business will gain momentum. To this end, we are working cooperatively with governments as they look to adapt their policies, based on science, and taking into account the significant health and safety measures Air Canada and the airline industry have implemented, to allow Canada to capture the economic benefits of the global recovery from the COVID-19 pandemic, many of which will be derived from increased trade and travel,” said Mr. Rousseau.

Fourth Quarter and Full Year 2021 Financial Results

Air Canada’s operating capacity, measured in Available Seat Miles (ASMs), increased by 134% in the fourth quarter of 2021 compared to the fourth quarter of 2020. When compared to the fourth quarter of 2019, it indicated a 47 percent drop, which is in line with Air Canada’s third-quarter 2021 earnings announcement, which was released on November 2, 2021.

  • Fourth-quarter 2021 passenger revenues of $2.041 billion increased more than four times from the fourth quarter of 2020
  • Fourth-quarter 2021 total operating revenues of $2.731 billion increased $1.904 billion or more than three times from the fourth quarter of 2020
  • Fourth-quarter 2021 total operating expenses of $3.234 billion increased $1.404 billion or 77 percent from the fourth quarter of 2020
  • Fourth-quarter 2021 net loss of $493 million or $1.38 per diluted share compared to a net loss of $1.161 billion or $3.91 per diluted share in the fourth quarter of 2020
  • In 2021, Air Canada’s ASMs decreased 11 percent from 2020. When compared to 2019, it represented a decline of 70 percent
  • 2021 passenger revenues of $4.498 billion increased $116 million or three percent from 2020
  • 2021 total operating revenues of $6.400 billion increased $567 million or 10 percent compared to 2020
  • 2021 total operating expenses of $9.449 billion decreased $160 million or two percent from 2020
  • 2021 net loss of $3.602 billion or $10.25 per diluted share compared to a net loss of $4.647 billion or $16.47 per diluted share in 2020

Unrestricted liquidity of $10.4 billion at December 31, 2021

 

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