Air Canada has reported second quarter 2019 EBITDA (earnings before interest, taxes, depreciation, amortization and impairment) of $916 million compared to second quarter 2018 EBITDA of $739 million.
The airline reported second quarter 2019 operating income of $422 million compared to second quarter 2018 operating income of $308 million. Air Canada reported adjusted net income of $240 million or $0.88 per diluted share in the second quarter of 2019 compared to adjusted net income of $129 million or $0.47 per diluted share in the second quarter of 2018. Second quarter 2019 net income amounted to $343 million or $1.26 per diluted share compared to a second quarter 2018 net loss of $102 million or $0.37 per diluted share.
“I am delighted to report an excellent second quarter, including record operating revenues of $4.757 billion and record liquidity of nearly $7 billion. Although our results exceeded expectations, the Boeing 737 MAX grounding negatively impacted EBITDA growth year-over-year. Our management team and all employees involved with this complex issue did an incredible job implementing creative solutions for our fleet, schedule, network and operations to get passengers to their destinations during the quarter,” said Calin Rovinescu, president and chief executive officer of Air Canada.
He added, “These are impressive results with revenue growth in each market segment and system passenger revenues up 10.7% on capacity growth of 2.3%. We also managed costs well, especially with the challenges of sourcing replacement flying for some of the Boeing 737 MAX aircraft that are out of service. We have now exceeded our CTP cost savings goal of $250 million and reduced our leverage ratio to 0.9 from 1.2 in the previous quarter. On June 27, we announced that we had concluded a definitive agreement to acquire Transat A.T. Inc. which, we believe, once closed, will benefit all stakeholders. Already, the merger’s benefits have been recognized by key stakeholders, including Unifor, Aéroports de Montréal, Tourism Montréal, leading travel agencies, the Chamber of Commerce of Metropolitan Montreal, the Conseil du patronat du Québec and the Federation of Chambers of Commerce of Québec.
“The impact of the Boeing 737 MAX grounding will be felt more acutely in our very busy summer period and, as a result, third quarter EBITDA is expected to increase approximately 5% versus the third quarter of 2018.”
Because the timeline for the return to service of the Boeing 737 MAX aircraft remains uncertain, for planning purposes, Air Canada is removing Boeing 737 MAX flying from its schedule until at least Jan. 8, 2020. Final decisions on returning the Boeing 737 MAX aircraft to service will be based on Air Canada’s safety assessment following the lifting of government safety notices and approval by international regulatory authorities.