Air Canada reported Q3 2024 results with $6.1 billion revenue and $1 billion income, exceeding expectations and improving operational efficiency.
MONTREAL – Air Canada reported its third quarter 2024 financial results.
“Air Canada reported solid results for the third quarter on key metrics, with operating revenues of $6.1 billion and operating income of $1 billion. Adjusted EBITDA of $1.5 billion and our adjusted earnings per share of $2.57 were both ahead of market expectations. We delivered on our ongoing operational improvement program, with quarterly on-time performance rising eight percentage points over the same period in 2023. I thank all our employees for their care and dedication in safely moving nearly 13 million customers in the quarter, including our Olympic and Paralympic athletes to the summer games in Paris,” said Michael Rousseau, President and Chief Executive of Air Canada.
“Summer is our peak season and this year our pilot contract negotiations added complexity. We proactively offered options and flexibility to customers, and I am proud that we concluded a mutually beneficial agreement without significant disruption to customers and with a contained revenue impact. I thank our customers for their loyalty and reiterate our promise to keep providing industry-leading products and services to them.
“The demand environment remains favourable. We have adjusted our full year guidance and underlying assumptions to account for the evolution of the fuel price environment and for certain contract-related adjustments. We are delivering on our commitments and are confident in our future. We are now announcing a new share buyback program, addressing some of the dilution experienced from financing decisions necessary during the pandemic, and returning value to shareholders. This additional step, after paying down our debt and funding our growth, is consistent with our capital allocation roadmap and our strategic plan, which we will detail at our Investor Day on December 17, 2024,” said Mr. Rousseau.
Third Quarter 2024 Financial Results
The following is an overview of Air Canada’s results of operations and financial position for the third quarter 2024 compared to the third quarter 2023.
- Operating revenues of $6.106 billion decreased $238 million or 4%, resulting from lower passenger revenues.
- Operated capacity increased 3%, lower than the capacity guidance of 4%-4.5% increase communicated in Air Canada’s news release dated August 7, 2024. This was primarily due to fleet constraints and to adjustments made to the operating schedule.
- Operating expenses of $5.066 billion increased $137 million or 3%. The increase was largely due to higher costs in most line items due to capacity growth and was partially offset by certain contract-related adjustments recorded this quarter.
- Operating income of $1.040 billion, with an operating margin of 17.0%, declined $375 million.
- Adjusted EBITDA of $1.523 billion, with an adjusted EBITDA margin* of 24.9%, declined $307 million.
- Net income of $2.035 billion, which included a favourable tax asset recognition of $1.154 billion, and diluted earnings per share of $5.38 compared to $1.250 billion and $3.08 per diluted share, respectively.
- Adjusted net income* of $969 million and adjusted earnings per diluted share* of $2.57, compared to $1.281 billion and $3.41 per diluted share, respectively.
- Adjusted CASM* of 12.15 cents decreased 0.4%, primarily due to the impact of contract-related adjustments recorded in the third quarter of 2024.
- Net cash flows from operating activities of $737 million increased $329 million.
- Free cash flow* of $282 million increased $147 million.
- Net debt-to-adjusted EBITDA ratio* (leverage ratio) was 1.0 at September 30, 2024, compared to 1.1 at December 31, 2023.
Outlook
For the full year 2024, Air Canada is updating its guidance to account for updated expectations of jet fuel prices and the impact of contract-related cost adjustments. Full year 2024 guidance is as follows:
| Metric | 2024 Guidance | Prior 2024 Guidance |
| ASM capacity | Approximately 5% increase versus 2023 | 5.5% to 6.5% increase versus 2023 |
| Adjusted CASM | Approximately 2% increase versus 2023 | 2.5% to 3.5% increase versus 2023 |
| Adjusted EBITDA | Approximately $3.5 billion | $3.1 billion to $3.4 billion |
*Adjusted CASM, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted EBITDA margin, leverage ratio, net debt, adjusted pre-tax income (loss), adjusted net income (loss), adjusted earnings (loss) per share, and free cash flow are referred to in this news release. Such measures are non-GAAP financial measures, non-GAAP ratios, or supplementary financial measures, are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. Refer to the “Non-GAAP Financial Measures” section of this news release for descriptions of these measures, and for a reconciliation of Air Canada non-GAAP measures used in this news release to the most comparable GAAP financial measure.
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