Air Canada released its Q3 results on 01NOV, and while the airline posted a $640 million net loss, it also reported operating revenues of $2.1 billion, almost triple the revenue of $757 million in Q3 2020.
The airline’s losses are shrinking, as it reports a negative EBITDA (earnings before interest, taxes, depreciation, and amortization) of $67 million compared to negative EBITDA of $554 million in the same quarter of 2020. As previously reported by OpenJaw, Air Canada reported a negative EBITDA of $656 million in Q2.
Air Canada attributes its Q3 growth to “strong advance ticket sales and a significant increase in passengers carried versus both the second quarter of 2021 and the third quarter of 2020.”
As of 30SEP 2021, Air Canada reports unrestricted liquidity of around $14.4 billion. This consists of around $9.5 billion in cash, cash equivalents, short- and long-term investments and around $4.9 billion available in undrawn funds from credit facilities.
It also reported net cash flow of $153 million, which is higher than management’s expectation of a net cash burn between $280-460 million.
Along with its liquidity position, the airline said it was confident in its position to emerge from the pandemic, and that it would continue to rebuild its network.
"We are encouraged by the favourable revenue and traffic trends in the third quarter, with strong increases in key passenger geographic segments, a record cargo performance and significant improvements in both Air Canada Vacations and Aeroplan,” said Michael Rousseau, President and CEO of Air Canada.
Rebuilding its Flight Network
In Q3, Air Canada increased its available seat miles (ASM) capacity by 87 per cent compared to Q3 2020. However, the airline is not quite back to pre-pandemic levels, as its Q3 ASM is still down 66 per cent compared to Q3 2019. Still, Air Canada notes that these numbers are in line with its expectations from its Q2 2021 results.
Over the quarter, Air Canada has followed up on its peak summer schedule serving a total of 50 Canadian destinations two new seasonal routes connecting YQB with YVR and YYC scheduled for MAY 2022, an increase to several South American destinations, including GRU, BOG, and SCL, as well as new service between YYZ and SDQ scheduled to begin on 16DEC, among others.
"Since the start of the year we have recalled more than 10,000 employees. We have expanded services to the U.S., and have launched new routes, such as to Cairo. We also announced expansions of our services to India and South America as well as the return next summer of popular seasonal destinations such as Barcelona, Venice, Nice and Reykjavik. To support our network restoration, we have reversed our decision to cancel two Airbus A220 aircraft orders and are now accelerating deliveries of new Boeing 737 MAX aircraft,” said Rousseau.
Additional Aircraft
Air Canada is also proceeding with the purchase of an additional two Airbus A220-300 aircraft for delivery in 2024. These two aircraft are part of the 12 Airbus A220-300 aircraft that the airline had previously determined it would not be purchasing under an amendment to the purchase agreement concluded with Airbus.
In addition, Air Canada reached an agreement with Boeing to accelerate the delivery of four Boeing 737 MAX aircraft for Q4 2021, for a total of seven deliveries this year. The remaining nine Boeing 737 MAX aircraft are now expected to be delivered by the end of Q2 2022, to reach a total of forty Boeing 737 MAX aircraft in the airline’s narrow-body fleet.
"I want to express my continuing gratitude to all our employees for their incredible efforts, resilience, and teamwork throughout the challenging past 20 months, most recently as we have worked hard to restart a very complex eco-system with our many partners. I am pleased these efforts were globally recognized when our employees recently won Best Airline Staff in Canada and Best Airline Staff in North America in the prestigious 2021 Skytrax World Airline Awards. Their unstoppable energy, purpose and steadfast optimism have lifted and inspired us all as we navigate towards brighter skies ahead," said Rousseau.
