Air Canada to Lease More Boeing 737 MAX, Reports Q1 2024 Loss

MONTREAL- Air Canada (AC) is currently finalizing lease agreements for additional Boeing 737 MAX 8 aircraft, expected to be delivered in 2024 and operational by 2025 following reconfiguration.

Today (May 2, 2024), Air Canada announced its financial results for the first quarter of 2024.

Photo: By Liam Allport – https://www.flickr.com/photos/liamallport/26903154127/, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=97287639

Air Canada Q1 2024 Results

“Air Canada achieved robust results in the first quarter, setting a solid foundation for the year ahead. Our operating revenues reached $5.2 billion, marking a $339 million increase compared to the previous year. We also saw growth in adjusted EBITDA, which rose by $42 million yearly to $453 million. I am grateful to our dedicated employees for their unwavering commitment to our 11 million customers, ensuring their safe and efficient travel throughout the quarter. Their efforts have notably led to a significant improvement in our system-wide on-time arrivals, positioning us well for the upcoming busy summer season,” stated Michael Rousseau, President and CEO of Air Canada.

“In the quarter, we generated over $1 billion in free cash flow, primarily driven by cash from operating activities. Our net debt-to-adjusted EBITDA ratio decreased to 0.9 by the end of the quarter. Furthermore, we continued to execute our strategy to reduce debt, resulting in recognition from credit rating agencies such as S&P Global Ratings, which recently upgraded our rating to ‘BB’ from ‘BB-‘ in April. We are confident in our ability to generate significant free cash flow for the full year 2024, supported by our strong balance sheet. This foundation will enable us to expand our airline through investments in our world-class global network and implementing capital allocation strategies to create sustainable, long-term value for Air Canada and its shareholders,” added Mr. Rousseau.

Photo: By TJDarmstadt – C-FJZS Air Canada B777-300ER, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=99703361

Key Highlights

Here are the First Quarter 2024 Financial Results:

• Total operating revenues amounted to $5.226 billion, marking a $339 million or 7% increase compared to the previous year, driven by an 11% growth in operated capacity.
• Operating expenses totaled $5.215 billion, rising by $311 million or 6%. This increase was attributed to higher costs across various areas, reflecting increased operated capacity and traffic compared to the previous year and elevated labor, maintenance, and information technology expenses. However, lower fuel expenses partially mitigated this rise.
• Operating income reached $11 million, with an operating margin of 0.2%, showing an improvement of $28 million.
• Adjusted EBITDA stood at $453 million, with an adjusted EBITDA margin of 8.7%, marking a $42 million improvement.
• The net loss amounted to $81 million, with a diluted loss per share of $0.22, compared to a net income of $4 million and a diluted loss per share of $0.03 in the same period last year.
• Adjusted net loss was $96 million, with an adjusted loss per diluted share of $0.27, compared to an adjusted net loss of $188 million and an adjusted loss per diluted share of $0.53 in the previous year.
• Adjusted CASM (Cost per Available Seat Mile) was 14.76 cents, up from 14.52 cents, representing a 1.6% increase primarily driven by higher labor, maintenance, and information technology expenses.
• Net cash flows from operating activities totaled $1.592 billion, marking a $155 million increase, supported by robust growth in advance ticket sales in line with seasonal trends.
• Free cash flow reached $1.056 billion, up by $69 million, supported by strong growth in advance ticket sales consistent with seasonal trends.
• The net debt-to-adjusted EBITDA ratio was 0.9 as of March 31, 2024, compared to 1.1 as of December 31, 2023, reflecting improvement driven by robust free cash flow in the first quarter of 2024.

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