Air Canada is reporting its financial results for the second quarter of 2021, with highlights of those results including:
- Operating revenues of $837 million, an increase of $310 million or 59 per cent from the second quarter of 2020.
- Negative EBITDA (1) (earnings before interest, taxes, depreciation, and amortization), excluding special items, of $656 million compared to negative EBITDA (excluding special items) of $832 million in the same quarter of 2020.
- Operating loss of $1.133 billion compared to an operating loss of $1.555 billion in the second quarter of 2020.
- Net cash burn (1) of $745 million, or about $8 million per day, on average.
- Unrestricted liquidity of nearly $9.8 billion at June 30, 2021.
Commenting on the results, Air Canada’s President and Chief Executive Officer of Air Canada, Michael Rousseau said: “The COVID-19 pandemic continued to weigh on Air Canada and the Canadian airline industry in the second quarter, with its impact on travel reflected in our results.”
Rousseau noted that: “Our employees, as they always have, focused on taking care of our customers while carrying them safely to their destinations, and continued to ensure the prudent management of our company. I thank them for their ongoing care, creativity and hard work in this very challenging and complex environment.”
Air Canada’s boss continued: “We are pleased to see vaccination rates increasing and more recent science-based easing of travel restrictions in Canada. The elimination of the quarantine period for fully vaccinated returning Canadians and the removal of other travel restrictions announced in June led to a significant increase in bookings.
And Rousseau noted: “We expect this trend to further increase following the July 19th announcement communicating positive changes to come for Canadian travel restrictions. Our employees and other stakeholders should be encouraged by the positive industry trends and the strong improvement in the outlook we see for our airline. However, as we have historically done, we will continue to manage both our cost structure and the balance sheet very conservatively.”
Rousseau said: “Our cash burn in the second quarter of about $8 million on average per day was better than earlier projections of $13-$15 million. We attribute this to increased bookings and our continuing effective cost controls. We ended the quarter with close to $9.8 billion in unrestricted liquidity.”
In this respect, he pointed out: “We have seen in countries where reopening is further along than in Canada that the easing of travel restrictions not only facilitates travel but also drives additional demand for air travel and provides a potent stimulus to overall economic activity. Our current booking trend seems to be evidence of this, and recent science-based easing of travel restrictions not only allows customers to travel but further adds to their confidence to make travel plans.”
Rousseau said: “Taking all these factors into account, we can optimistically say that we are turning a corner and expect to soon see correlated financial improvements as evidenced by our cash burn guidance of $3-$5 million per day for the third quarter.”
And Air Canada’s boss concluded: “We are excited and ready to welcome back our valued customers in greater numbers and to introduce them to the many improvements we have made to enhance their journey. I remain fully confident that Air Canada will rebuild stronger and rise higher than ever before.”