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Air Canada Reports 2019 Operating Income of $1.65B on Record Revenue of $19.1B

On Tuesday, Air Canada reported a 2019 operating income of $1.65B compared to $1.5B for FY 2018. The airline reported record operating revenues of $19.1B, and a 13 percent increase in EBITDA to $3.2B with an EBITDA margin of 19 percent.

Air Canada Boeing 787-9 Dreamliner - Courtesy Air Canada

Air Canada reported their 2019 financial results on Tuesday, with a record operating revenue of $19.131B. The carrier reported an operating income of $1.650B compared to 1.496B in FY 2018. EBITDA increased 13 percent year-over-year (YoY) to $3.636B and EBITDA margin came in at 19 percent. The airline also reported a record $7.380B of unrestricted liquidity and a leverage ratio of 0.8. In Tuesday’s announcement, Air Canada’s President and Chief Executive Officer, Calin Rovinescu said in part,

“I am very pleased to report strong fourth quarter and full year results for 2019, a year in which we generated record revenues in excess of $19 billion and reached record levels of unrestricted liquidity, despite the loss to Air Canada of approximately 25 percent of our narrow-body fleet for most of the year following the worldwide grounding of the Boeing 737 MAX. These results underscore the airline’s ability to overcome major challenges as well as the deep commitment of Air Canada’s 37,000 strong team, which took care of our customers under extremely complicated operational circumstances. With this backdrop, I am especially proud that we are able to deliver on the outlook we provided for key financial metrics for the year. Our discipline was rewarded by an 87 percent return on our shares in 2019, which, when added to our returns over the previous nine years, made Air Canada the top performing stock on the TSX for the past decade with a 3,575 percent return.”

For 2019, Air Canada’s operating expenses increased 6 percent YoY to $17.481B, while adjusted cost per available seat mile (CASM) increased 6.1 percent. The carrier estimates that if their fleet of 36 Boeing 737 MAX aircraft had remained in operation during the year, adjusted CASM would have increased only 2.5 percent YoY. Net income for the full year came in at $1.476B or $5.44 per diluted share versus a FY 2018 net income of $37M or $0.13 per diluted share. The airline reported an adjusted net income of $917M or $3.37 per diluted share for 2019, compared to an adjusted net income of $738M or $2.67 per diluted share for FY 2018.

In 2019, Air Canada's net operating cash flows increased $2.242B to $5.712B, while free cash flow increased $748M YoY to $2.075B. Return on invested capital (ROIC) for FY 2019 came in at 15.5 percent, significantly higher than the carrier’s weighted average cost of capital of 7.0 percent. In afternoon trading on the Toronto Stock Exchange Tuesday, shares in Air Canada (XTSE: AC) were trading down 3.31% at $44.69/share (12:00PM EST).

Source: Air Canada

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