Canada NewsWire
MONTREAL, Feb. 16, 2024
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.
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.
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 | $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 | $ | 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) Werbung Mehr Nachrichten zur Air Canada A Aktie kostenlos abonnieren
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