Air Canada Reveals 2024 Second Quarter Report of Financial Results, pointing out some challenges and adjustments to its outlook for the year. The airline’s operating revenue for the quarter was $5.52 billion, showing a slight increase from the previous year. However, its operating income decreased to $466 million, compared to $802 million in 2023. The decrease in profitability is attributed to lower yields, competitive pressures, and lower-than-expected load factors.
Overview of the Second Quarter Report
Michael Rousseau, President and Chief Executive Officer of Air Canada, said on this occasion :
In the second quarter, Air Canada reported operating revenues exceeding $5.5 billion and adjusted EBITDA of $914 million. The airline maintained strong demand and improved on-time performance, transporting 11.6 million customers. Air Canada was recognized as the top airline in Canada and received five accolades at the Skytrax 2024 World Airline Awards.
The report covered all the revenues and operation expenses of the 2024 second quarter. Here are the most important points in the results.
In the second quarter of 2024, Air Canada reported a 2% increase in operating revenues to $5.519 billion, driven by a 6.5% rise in capacity. However, operating expenses grew by 9% to $5.053 billion, leading to a significant drop in operating income to $466 million. Adjusted EBITDA decreased by $306 million to $914 million, and net income fell to $410 million from $838 million. Additionally, adjusted net income declined to $369 million, and free cash flow dropped by $514 million to $451 million. Despite these challenges, the net debt-to-adjusted EBITDA ratio slightly improved to 1.0 by the end of June 2024.
Additional Important Indicators in the Report
Air Canada uses adjusted CASM and adjusted EBITDA to show its financial performance more clearly. These measures leave out certain costs, like aircraft fuel and ground packages, which can change a lot or are specific to Air Canada. For example, fuel costs are left out because they change a lot, and ground package costs are not included because not all airlines have these expenses. These changes help to show a more accurate analysis of Air Canada’s ongoing business performance.
Furthermore, the airline evaluates its financial performance using adjusted pre-tax income (loss). This involves excluding certain items such as foreign exchange gains or losses, net interest related to employee benefits, and gains or losses on financial instruments. This adjustment aims to provide a clear analysis of business trends and facilitate meaningful comparisons with other airlines. In the second quarter of 2024, the adjusted pre-tax income was CAD 371 million, showing a decrease of CAD 285 million from 2023. For the first six months of 2024, it amounted to CAD 277 million, down CAD 185 million from the previous year.
More About Air Canada
Air Canada is the largest airline in the country and serves as the flag carrier, providing scheduled services to over 180 destinations and offering various services and travel options. Even after the report, The airline is highly committed to protecting the environment and is aligned with the Sustainable Development Goals, striving to achieve net-zero emissions by 2050. Additionally, it is a founding member of Star Alliance, the largest transportation network, and has earned a Four-star ranking from Skytrax.
Air Canada operates a diverse fleet for its routes, which includes Airbus, Boeing 777, Boeing 787, and numerous others for short-haul flights. Several divisions support the airline such as Air Canada Express, Jazz, and Cargo.
In conclusion, Air Canada is actively setting targets, making commitments, and evaluating the impact of climate change and carbon emissions. Success depends on collective actions and advancements in technology, including sustainable aviation fuels.
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