Air Canada achieved strong results in the third quarter of 2023, generating solid operating revenues of more than $6.3 billion, a 19% increase over the same period last year. Operating income for the quarter more than doubled to $1.4 billion.
“Our focus on growing our international network, building scale at our hubs and leveraging our solid partnerships is delivering strong results,” said president and CEO Michael Rousseau.
“Our operating income reached $1.4 billion, more than double from a year ago, and adjusted EBITDA grew by $773 million to $1.83 billion, representing an adjusted EBITDA margin of nearly 29%. I thank our employees and management team for their hard work in safely transporting 12.6 million customers during the busy and demanding summer season.”
Air Canada president and CEO Michael Rousseau (Photo Credit: Air Canada Media License)
Rousseau says Air Canada was effective in managing costs, with operating expenses up 5% on a 10% capacity increase.
“We have continued to pay down debt in the quarter, lowering our leverage ratio to 1.4 from 5.1 at the end of last year, while also maintaining a healthy level of liquidity, which stood at nearly $10 billion at the quarter's end," Rousseau added.
Air Canada says its strategy has been “to grow back the airline and improve operational stability, while mitigating risks.”
There are always plenty of risks in aviation, Rousseau says, including “navigating geopolitical uncertainty, inflation and the volatile fuel price environment, meeting increased competition and dealing with supply chain, and the evolving regulatory environment.”
The ability to adapt, bolstered by continuing strong demand, gives AC “every confidence for the rest of the year and into 2024 despite the inevitable headwinds to which our global industry is prone,” Rousseau says.
Air Canada 787 (Photo Credit: Air Canada 787)
Here are some highlights from Air Canada’s third quarter, 2023:
· Operating revenues of $6.344 billion increased over $1 billion from the third quarter of 2022 driven by higher passenger revenues.
· Operated capacity increased 10 per cent from the third quarter of 2022.
· Operating expenses of $4.929 billion increased $251 million or 5% from the third quarter of 2022. Lower aircraft fuel expense resulting from 23% lower jet fuel prices partially offset the increase.
· Operating income of $1.415 billion, with an operating margin of 22.3 per cent, improved $771 million from the third quarter of 2022.
· Net income of $1.250 billion increased $1.758 billion from the third quarter of 2022.
· Diluted earnings per share of $3.08 compared to a diluted loss per share of $1.42 in the third quarter of 2022.
· Free cash flow of $135 million increased $178 million from the third quarter of 2022.
For the fourth quarter of 2023, Air Canada plans to increase capacity by about 10% from the same quarter in 2022.
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