Photo from Newswire
Air Canada recently released its financial results for the first quarter of 2024. The airline reported total operating revenues of $5.2 billion, representing a 7% increase compared to the same period last year. Operating income stood at $11 million, while adjusted EBITDA reached $453 million. Notably, the airline achieved a double-digit improvement in on-time arrivals compared to the first quarter of 2023. Additionally, Air Canada reported a leverage ratio of 0.9 as of March 31, 2024.
According to Michael Rousseau, President and CEO of Air Canada, the solid first-quarter results position the airline for a strong performance in 2024. He attributed the positive outcome to the efforts of the airline's employees in serving their 11 million customers and improving operational efficiency. Rousseau expressed confidence in meeting the company's full-year guidance for 2024.
The airline generated over $1 billion in free cash flow during the quarter, primarily from operating activities. This led to a reduction in the net debt-to-adjusted EBITDA ratio to 0.9 by the end of the quarter. Air Canada's progress in deleveraging its balance sheet was recognized by credit rating agencies, with S&P Global Ratings upgrading the airline's rating to 'BB' from 'BB-' in April.
Looking ahead to the summer, Air Canada anticipates a continued healthy demand environment, offering customers a wide range of travel options across Europe, Asia, and North America for their holiday planning. The airline aims to leverage its strong balance sheet to grow its global network and create long-term value for shareholders.
In terms of financial performance, operating revenues for the first quarter totaled $5.226 billion, reflecting an 11% increase in operated capacity year over year. Operating expenses increased by $311 million to $5.215 billion, driven by higher costs in various categories due to increased capacity and traffic. Despite higher expenses, operating income improved by $28 million to $11 million, with an operating margin of 0.2%.
Adjusted EBITDA for the quarter reached $453 million, with an adjusted EBITDA margin of 8.7%, representing a $42 million improvement compared to the previous year. However, the airline reported a net loss of $81 million, with a diluted loss per share of $0.22, compared to a net income of $4 million in the same period last year. Adjusted net loss for the quarter was $96 million, with an adjusted loss per diluted share of $0.27.
Adjusted CASM (cost per available seat mile) increased to 14.76 cents from 14.52 cents, mainly due to higher expenses in labor, maintenance, and information technology. Despite these challenges, net cash flows from operating activities increased by $155 million to $1.592 billion, driven by strong growth in advance ticket sales.
Looking ahead, Air Canada plans to increase its ASM (available seat mile) capacity by about 7% in the second quarter of 2024 compared to the same period in 2023. The airline reaffirmed its guidance for the full year 2024, including expectations for ASM capacity growth, adjusted CASM, and adjusted EBITDA.
Overall, Air Canada remains committed to delivering strong financial performance while focusing on enhancing customer experience and expanding its global reach.
