Air Canada is reporting record second quarter 2017 EBITDAR (earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent) of $670 million compared to the previous record second quarter 2016 EBITDAR of $605 million, an increase of $65 million.
The airline recorded a second quarter EBITDAR margin of 17.1%. On a GAAP basis, AC reported second quarter operating income of $281 million versus operating income of $277 million in the second quarter of 2016.
“I am pleased to report that in our second quarter we delivered record operating revenues, record EBITDAR and ended with record liquidity levels, exceeding last year’s financial results and analysts’ consensus estimates for EBITDAR,” said Calin Rovinescu, president and chief executive officer. “We also improved our guidance for key financial measures, including a significant improvement in projected free cash flow for 2017.
“Moreover, we delivered an excellent unit cost performance and our unit revenue, on a stage-length adjusted basis, increased 1.6% versus last year’s quarter. These are important drivers of margin expansion and are the result of the successful execution of our business plan.
“With the launch of 16 international and US transborder routes this quarter alone, we continue to increase international-to-international connecting passengers via Canada. On June 29, we served close to 167,000 customers, setting an all-time record which we expect to surpass during the upcoming August long weekend. Demand continues to be robust in a stable fuel and pricing environment as we move into what has historically been our most important quarter given the travel demands and patterns of our North American customers. In 2018, capacity growth, driven by our wide-body fleet expansion, will begin to slow as we shift our focus to our mainline narrow-body fleet replacement program which is expected to further reduce our unit costs and improve operating margins.”
Air Canada now expects to achieve an annual EBITDAR margin of 17% to 19% for the full year 2017 and 2018, as opposed to the annual EBITDAR margin of 15% to 18% projected in a May 5 news release.