Transformed By Change
Air Canada has reported record full year adjusted net income of $1.222 billion or $4.18 per diluted share compared to record adjusted net income of $531 million or $1.81 per diluted share in 2014 – an improvement of $691 million or $2.37 per diluted share.
EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) amounted to $2.534 billion compared to EBITDAR of $1.671 billion in 2014 — an improvement of $863 million or 51.6%.
On a GAAP basis, Air Canada reported operating income of $1.496 billion in 2015, an increase of $681 million or 83.6% from 2014. The airline reported net income of $308 million or $1.03 per diluted share in 2015 compared to net income of $105 million or $0.34 per diluted share in 2014.
Calin Rovinescu, president and CEO for Air Canada, commented: “In 2015, we achieved the best financial results in Air Canada’s history for a second year in a row, by a substantial margin, underscoring the effectiveness of our business strategy and enhanced competitive position.”
Rovinescu pointed out that: “Our results reflect the significant progress being achieved through our various value-enhancing initiatives, including fleet modernization, international expansion, the roll-out of rouge and our network diversification.”
And Air Canada’s boss continued: “As I have said previously, our plan is not dependent on fuel prices staying at current levels, …the transformative changes we’ve made in recent years provide us with a cost structure, fleet and flexibility to respond, as we did in 2015, to competitive market conditions, fluctuations in the Canadian dollar and to economic weakness.”
He noted that: “Moreover, we have a proven track record of proactively managing and allocating capacity to meet demand, as we did last year upon seeing signs of weakness in Western Canada; and we will continue to adjust capacity to maximize profitability.”
Rovinescu said that: “Looking forward, we are committed to maintaining the strong momentum that we achieved in 2015 and we remain firmly on track to execute on all of our key objectives. We are therefore reconfirming today the three key financial targets established at our June 2015 Investor Day: namely an annual EBITDAR margin of 15% to 18% from 2015 to 2018; a year-over-year return on invested capital of 13% to 16% from 2015 to 2018; and reducing our leverage ratio to 2.2 or less by 2018.”
Rovinescu added: “These metrics are the main financial indicators we use to measure the continuing success of our long range plan which is focused on margin expansion and sustained profitability. In addition, we remain committed to reducing our unit costs and are on track to realizing CASM savings of 21%, excluding the impact of foreign exchange and fuel prices, by the end of 2018 when compared to 2012.”
Concluding his remarks, Air Canada’s president and CEO observed: “We’ve transformed and created a solid financial framework for our airline. We have remarkable employees who are rising to the challenge and I would like to thank and acknowledge their dedication and efforts to deliver exceptional customer service and an excellent financial performance in 2015.”
