Air Canada has recently released their fourth-quarter and full-year 2023 financial results. The airline announced that in its fourth quarter, it saw operating revenues of $5.175 billion, an 11% ($495 million) increase from its previous year. As for the full year, according to the report, the airline has reached a record operating revenue of $21.833 billion in 2023. This marks an incredible 32% ($5.277 billion) increase.
Fourth Quarter 2023 Takeaways
- The airline boasts profits of $5.175 billion in operating revenues. This has increased by $495 million from the final quarter of the previous year, showing an 11% rise on an operated capacity growth of over 9% annually, highlighting Air Canada’s exponential growth.
- Due to the increase in all line item costs, operating expenses of $5.096 billion were increased by 8% ($388 million). This reflects things such as high wages, salaries, and benefits for employees and higher operated capacity growth and traffic year over year.
- With its operating margin of 1.5%, the airline revealed that its operating income of $79 million in 2022 improved to $107 million in 2023.
- Air Canada is experiencing strong demand for air travel with the differences in their net incomes for Q4 in 2022 compared to 2023. In 2022, the airline had a net income of $168 million compared to $184 million in 2023.
- Sitting at $0.41 per share, there hasn’t been an increase or a decline in the money shareholders earned from 2022 to 2023.
- The airline revealed an adjusted net loss of $44 million with an adjusted loss per diluted share of only $0.12. This is a drastic improvement compared to 2022 Q4, with its net loss of $217 million and adjusted loss per diluted share being $0.61.
Full Year 2023 Takeaways
- The airline has revealed record operating revenues of $21.833 billion. This major influx of 32% was on a 20% growth in operated capacity.
- Operating expenses of $19.554 billion overall did increase by 17% ($2.811 billion). In a similar trend to their Fourth Quarter operating expenses going up, this was due to the increase in all line operations, a reflection of higher salaries, wages, and employee benefits, etc. Furthermore, this increase in expense could also be reflected in the maintenance cost adjustment of $159 million that was recorded in the first quarter of 2022.
- Air Canada had an operating income of $2.279 billion with an operating margin of 10.4%, improving overall by $2.466 billion.
- They had a net income of $2.276 billion and diluted earnings per share of $5.96 compared to a net loss of $1.7 billion and a diluted loss per share of $4.75. In addition, they had an adjusted net income of $1.713 billion with adjusted earnings per diluted share of $4.56 compared to an adjusted net loss of $988 million and an adjusted loss per diluted share of $2.76.
Air Canada’s Adjusted CASM and EBITDA
The airline has been using an adjusted CASM to assess its operating and cost performance without the effects of fuel expenses, impairment of assets and freighter costs, and costs of ground packages at Air Canada Vacations. This is due to the fact that these things may potentially distort the analysis of business trends and submit comparative analysis across periods to become less meaningful.
Adjusted EBITDA margin is also commonly used when calculating data in the airline industry. Air Canada uses it as a way to accurately measure the operating margin before things such as interest, taxes, depreciation, and amortization. This is due to the fact that these specific costs can vary significantly amongst differing airlines due to the different ways in which airlines choose to finance their aircraft and any further assets.
It’s safe to say that Air Canada’s financial results have boomed since its previous year. What do you think about this? Let us know in the comments! Want to learn more about how other airlines have fared financially? Learn more here.
