Having carried 36 million passengers in 2022 and posting record passenger and operating revenues in Q4, Air Canada says it has a “positive outlook” for the start of 2023 and beyond. The carrier also reported achieving 83% of its pre-pandemic passenger revenue recorded in 2019.
Air Canada company reported a $168-million profit for the three months ending Dec. 31, a period that included the turbulent Christmas travel season and a continent-wide storm that caused “four-foot icicles” on some aircraft, an Air Canada executive shared during a call with analysts on Friday.
Overall, Air Canada still posted a $1.7-billion loss for the year amid a rocky recovery from COVID-19 restrictions and the collapse of travel. But its strong fourth quarter helped brighten the outlook for 2023 and chart a turnaround for Canada’s largest airline.
Indeed, Air Canada announced plans to boost capacity this year with plans to increase to increase its so-called available seat miles – an aviation term that refers to an airline’s carrying capacity and ability to generate revenues – by about 50% in the first quarter of 2023 compared with the same period last year.
“We are pleased with our fourth quarter and full year 2022 financial results,” said Air Canada President and CEO Michael Rousseau, who attributed the strong results to solid demand and yield environments across its network.
“Our performance is attributable to the deep resilience we have built into our company for long-term stability,” he added.
Among the results reported:
• Record fourth quarter passenger revenues of $4.062 billion, doubled than fourth quarter 2021 and about 2% higher than fourth quarter 2019
• Record fourth quarter operating revenues of $4.680 billion, 71% higher than fourth quarter 2021 and about 6% higher than fourth quarter 2019
• Operating losses of $28 million in the fourth quarter of 2022 and of $187 million for the full year 2022
• Total liquidity of over $9.8 billion at Dec. 31, 2022
• Positive free cash flow of $320 million.
“These results also validate our strategy of diversifying our revenue sources,” said Rousseau, who also noted that:
• Core passenger business, revenue was about 2% higher than in the fourth quarter of 2019
• Revenue from premium cabins was about 13% higher, supported in part by Aeroplan with the loyalty program’s active membership at an all-time high
• Air Canada Vacations ground package revenues contributed to the growth in other revenues of $62 million, or 23% higher than the fourth quarter of 2019
• Air Canada Cargo revenue was up 55% compared to the same quarter pre-pandemic.
For the entire 2022 year, Air Canada reported that its operating capacity, measured by Available Seat Miles (ASMs) increased two-and-a-half times from 2021, representing about 73% of 2019 ASMs and that passenger revenues of $14.238 billion more than tripled from 2021, recovering to about 83% of 2019 passenger revenues.
The airline expects to achieve 100% recovery of ASMs in 2024.
Rosseau stated: “We are very encouraged with the positive outlook ahead. Our quarterly ticket sales were 102% of the fourth quarter of 2019, on a lower level of capacity, and we expect a solid demand environment in 2023.”
“In anticipation,” he added, “we are building out our global network, continuing our narrow-body fleet renewal, and investing in technology and customer service.”