Exceeding Expectations

Air Canada has reported its first quarter results for 2023, which Michael Rousseau, the company’s President and Chief Executive Officer, describes as ‘impressive’ and a reflection of the ‘strength’ of the carrier’s brand.

Highlights of the results include:

• Record first quarter passenger revenues of $4.088 billion, more than double the first quarter of 2022, on a 53 per cent increase in operated capacity
• Record first quarter operating revenues of $4.887 billion, 90 per cent higher than first quarter 2022 and about 10 per cent higher than first quarter 2019
• Operating loss of $17 million, improved from an operating loss of $550 million in the first quarter of 2022
• Adjusted EBITDA* of $411 million with adjusted EBITDA margin* of 8.4 per cent
• Cash flows from operations of $1.437 billion
• Total liquidity of over $10.5 billion at March 31, 2023

Rousseau observed: “Air Canada’s impressive first quarter performance reflects the strength of our brand, the very strong demand environment across all markets and the effective execution of our strategic plan. When compared to the same quarter in 2022, passenger revenues more than doubled and hit a first quarter record of close to $4.1 billion, supported by our diversified network and our strong international franchise. Adjusted EBITDA surged by $554 million to $411 million, and our adjusted CASM* fell nearly seven per cent from a year ago.”

In fact, the airline’s boss pointed out that: “Our first quarter financial results exceeded both internal and external expectations and we expect demand to persist, supported by strong advance bookings for the remainder of the year.  For this reason, as well as lower-than-expected fuel costs, we increased our 2023 adjusted EBITDA guidance last week. I thank all employees for their continued focus on improving all aspects of our company through effective and positive teamwork, and our customers for their loyalty.”

Rosseau said that: “All areas of the business contributed meaningfully during the quarter. Air Canada Cargo is expanding its network and fleet, Aeroplan is gaining more members and gross billings have increased 50% when compared to the first quarter of 2022, and Air Canada Vacations produced remarkable results. System yields improved approximately 9 per cent compared to the first quarter of 2022. We achieved a strong free cash flow* of nearly $1 billion. This will allow us to continue investing in our future, including by further deleveraging our balance sheet.”

For the second quarter of 2023, Air Canada plans to increase its ASM capacity by about 22% from the same quarter in 2022.

• Adjusted CASM, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted EBITDA margin, leverage 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.