MONTREAL — Air Canada posted a $168-million profit in its most recent quarter as passenger and operating revenues reached record highs.
The Montreal-based airline says its fourth-quarter profit amounted to 41 cents per diluted share and compared with a loss of $493 million or $1.38 in the same period during 2021.
Profit for the period ended Dec. 31 included a foreign exchange gain of $316 million and covered the busy holiday season.
Adjusted earnings totalled $389 million, an increase from $22 million in the fourth quarter of 2021. Passenger revenues hit $4.062 billion, doubling from the fourth quarter 2021 and about two per cent higher than the same period in 2019. Operating revenues reached $4.680 billion, 71 per cent higher than the fourth quarter 2021 and about six per cent higher than the same quarter in 2019.
“We are pleased with our fourth quarter and full year 2022 financial results. We reported record four quarter passenger and operating revenues, surpassing our results from a year ago and those of the fourth quarter of 2019,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.
Rousseau credited the progress to the “dedication and hard work of our employees,” who he says helped transport more than two million customers during a holiday period challenged by severe winter weather across North America.
“I warmly thank them,” he said.
FULL YEAR 2022 RESULTS
Operating capacity, measured by Available Seat Miles (ASMs), increased 2.5x more than 2021, representing about 73% of 2019 ASMs.
Passenger revenues of $14.238 billion more than tripled from 2021, recovering to about 83% of 2019 passenger revenues, while operating revenues of $16.556 billion increased over 2.5x from 2021, recovering to about 87% of 2019 operating revenues.
Said Rousseau: “Our performance is attributable to the deep resilience we have built into our company for long-term stability…For the full year, we reported adjusted EBITDA of $1.457 billion and an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 8.8 per cent, meeting our full-year 2022 guidance. We ended the year with total liquidity of more than $9.8 billion.
“These results also validate our strategy of diversifying our revenue sources. In our core passenger business, revenue was about two per cent higher than in the fourth quarter of 2019. Revenue from our premium cabins was about 13 per cent higher, supported in part by Aeroplan. The loyalty program’s active membership is at an all-time high and continues to grow, and Air Canada Cargo revenue was up 55 per cent compared to the same quarter pre-pandemic. Similarly, Air Canada Vacations ground package revenues contributed to the growth in other revenues of $62 million, or 23 per cent higher than the fourth quarter of 2019.”
FUTURE OUTLOOK
For the first quarter of 2023, Air Canada plans to increase its ASM capacity by about 50% from the same quarter in 2022.
For 2024, the airline expects a full year ASM capacity of about 100% of 2019 ASM levels, and adjusted CASM (adjusted cost per available seat mile) to increase by about 8-10% when compared to 2019. The increase, says Air Canada, is due to the impact of higher passenger traffic (which increases sales and distribution costs), higher staffing levels and general inflationary pressures.
For 2024, Air Canada also expects its adjusted EBITDA to range between about $3.5-$4.0 billion.
“We are very encouraged with the positive outlook ahead. Our quarterly ticket sales were 102 per cent of the fourth quarter of 2019, on a lower level of capacity, and we expect a solid demand environment in 2023,” said Rousseau.
“In anticipation, we are building out our global network, continuing our narrow-body fleet renewal, and investing in technology and customer service. More than 36 million people chose to fly with Air Canada last year. We appreciate and thank them for their loyalty. We intend to do much more to provide them with an elevated level of customer service and continuous value from our airline in 2023 and beyond,” he added.
