Air Canada Reports First Quarter 2022 Net Loss of $974 Million or $2.72 per Diluted Share
Air Canada has reported a first quarter 2022 net loss of $974 million or ($2.72) per diluted share on a 3.5 times year-over-year revenue increase to $2.6 billion. At March 31, 2022, the carrier had approximately $10.2 billion in unrestricted liquidity.
On Tuesday (April 26, 2022), Air Canada reported their first quarter financial results for the period ending March 31, 2022. The carrier reported a first quarter net loss of $974 million or ($2.72) per diluted share compared to a Q1 2021 net loss of $1.3 billion or ($3.90) per diluted share during the same period last year. Air Canada’s first quarter operating revenues increased approximately 3.5 times versus Q1 2021 to $2.57 billion, while operating expenses increased year-over-year by 76 percent to $3.1 billion. For the first quarter, the airline’s cost per available seat mile (CASM) was 21.8 cents compared to first quarter 2021 CASM of 42.2 cents. Air Canada’s adjusted first quarter CASM (costs excluding fuel and a series of other special items) was 15.6 cents versus 40.4 cents during Q1 2021. At March 31, 2022, the carrier has approximately $10.2 billion in available unrestricted liquidity.
In Tuesday’s announcment, Air Canada’s President and Chief Executive Officer, Michael Rousseau, said,
“The substantial year-over-year improvement in Air Canada's first quarter results is clear evidence that a recovery is underway. Our strong improvement is a testament to our employees, and I thank them for their hard work taking care of our customers throughout more than two years of a global pandemic. Now, our employees are demonstrating this same level of determination, commitment and passion in executing on our recovery strategy.
“The year began with weakness brought on by the Omicron variant and travel restrictions. However, we quickly rebounded in March with passenger volumes exceeding the strong December levels and passenger ticket sales in March 2022 over 90 per cent of March 2019 levels, a leading indicator to much stronger 2022 second and third quarter results. For the quarter, Air Canada had operating revenues of $2.573 billion, more than triple that of the same quarter in the prior year. This was accompanied by a strict cost discipline that reduced adjusted CASM by over six per cent from the fourth quarter of 2021. Quarterly EBITDA, while a negative $143 million, improved $620 million over last year and we ended the quarter with $10.162 billion in unrestricted liquidity, close to 2021 year-end levels.
“In anticipation of our recovery, Air Canada has kept the course with key long-term projects to increase and diversify revenue and lower costs. One such program is the expansion of Air Canada Cargo, with quarterly revenue up 42 per cent to $398 million from the first quarter of 2021, and now further expanded with the addition of two new Boeing 767-300 freighters to be delivered in 2022. The renegotiation of key engine maintenance contracts completed in the quarter, will also yield savings over the remaining life of the contracts. Aeroplan air redemption bookings in the quarter exceeded those of the same quarter in 2019 by 19 per cent. The relaunched program saw the highest new member acquisitions and redemptions in a quarter, and generated third-party gross billings exceeding first quarter 2019 levels by 21 per cent.
“Air Canada is rapidly adapting for the post-pandemic world. We are doing our part by contributing to the travel of Ukrainians to Canada, with a substantial donation of 100 million Aeroplan points. We have also advanced our ESG goals in the quarter by announcing an order for 26 fuel-efficient Airbus A321XLR aircraft, which we have now increased to 30 aircraft. As well, we have recently entered into a long-term agreement with International Aero Engines, LLC (Pratt & Whitney) for the selection of the PW1100G-JM engines, spare engines and related maintenance services for these new aircraft. We are responding to the evolving competitive landscape through our Rise Higher strategy to elevate all aspects of our business, particularly as it relates to the customer experience. Given pent-up travel demand, the demonstrated loyalty of our customers, and the expected further removal of travel-related government restrictions, Air Canada anticipates its recovery will gain momentum through the balance of 2022 and beyond.”
In February 2022, Air Canada made several announcements regarding and expansion of their summer schedule. The carrier’s summer 2022 North American network will include the launch of new service on four transborder and three domestic routes, as well as restoration of 41 North American routes. In total, this summer Air Canada will operate service to 51 Canadian and 46 U.S. airports, along with the relaunch of 34 transatlantic and transpacific routes. Additionally, during the first quarter the carrier increased their Airbus A321XLR order by four to 30 aircraft, with IAE to supply the related Pratt& Whitney PW1100G-JM engines.
Air Canada is Canada’s largest domestic and international airline. The Canadian flag carrier is a founding member of the Star Alliance and the only international network carrier in North America to receive a Four-Star ranking from Skytrax. For the last three years Air Canada was also named Global Traveler’s ‘Best Airline in North America.’ Additionally, the airline has committed to a net zero emissions goal from all global operations by 2050.
Source: Air Canada/CNW Telbec