Airlines are far from out of the woods yet, but Air Canada's fourth quarter and full year 2021 financial results include some positive signs of recovery.
Fourth quarter 2021 operating revenues of $2.731 billion were 30% higher than Q3, and over three times Q4 2020 operating revenues. And while a full year 2021 operating loss of $3.049 billion isn't pretty, it's still an improvement compared to an $3.776 billion in 2020.
In another positive indication, the Q4 2021 operating loss of $503 million was half of the $1.003 billion loss in Q4 2020.
"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," said Michael Rousseau, President and CEO.
"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."
Cargo helped ease the pain for the airline, which posted record cargo revenues in 2021 of $1.495 billion compared to 2020 cargo revenues of $920 million
Air Canada reported unrestricted liquidity of $10.4 billion at December 31, 2021, practically unchanged from September 30, 2021.
"We grew our capacity 26% from the previous quarter, while continuing to successfully manage load factor and yields in the right direction," said Rousseau. "Prior to Omicron's onset, ticket sales reached 65% 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 cancelled," Rousseau stated.
More signs of improvement:
-- Air Canada was serving 118 destinations at the end of 2021 up from 70 at its start.
-- The average number of daily flights rose to 665 in December 2021 from 245 in January 2021.
-- More than 10,000 laid-off staff members have been recalled, including 3,900 in the fourth quarter.
-- AC plans to increase its first quarter capacity by 243% from the same quarter in 2021. However, compared to the same period in 2019, first quarter capacity is expected to still be down about 44%.
"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," Rousseau said.
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