Unmistakable Signs Of Revival

Air Canada is reporting its fourth quarter and full year 2021 financial results with highlights including:

• Fourth quarter 2021 operating revenues of $2.731 billion, 30% higher than in the third quarter of 2021, and over three times fourth quarter 2020 operating revenues
• Fourth quarter 2021 operating loss of $503 million compared to an operating loss of $1.003 billion in the fourth quarter of 2020
• Fourth quarter 2021 EBITDA (earnings before interest, taxes, depreciation, and amortization), excluding special items, of $22 million compared to negative EBITDA (excluding special items) of $728 million in the same quarter of 2020
• Full year 2021 operating revenues of $6.400 billion compared to 2020 operating revenues of $5.833 billion
• Record cargo revenues in 2021 of $1.495 billion compared to 2020 cargo revenues of $920 million
• Full year 2021 operating loss of $3.049 billion compared to an operating loss of $3.776 billion in 2020
• Full year 2021 negative EBITDA (excluding special items) of $1.464 billion compared to negative EBITDA (excluding special items) of $2.043 billion in 2020
• Unrestricted liquidity of $10.4 billion at Dec. 31, 2021, practically unchanged from Sept. 30, 2021, excluding funds that were available at Sept. 30, 2021 under the financial package with the Government of Canada

Commenting on the results, Air Canada’s president and CEO, Michael Rousseau said: “The unpredictable course of COVID-19 made 2021 extremely challenging for Air Canada and the global airline industry. But the sequential and year-over-year improvement in Air Canada’s fourth quarter results shows the underlying recovery remains intact despite the Omicron variant.”

Rousseau continued: “Our progress rebuilding our airline is due to the hard work, resourcefulness, and commitment of our people. I warmly thank our employees for their dedication and professionalism, which have been unwavering through nearly two years of a global pandemic. I also thank our customers, including shippers, for their steadfast loyalty in continuing to choose Air Canada.”

Air Canada’s boss noted that: “As restrictions lift and more people return to flying with us, they will discover measures introduced for COVID safety have been adapted to smooth their journey. As we look at our renewed commitment to customer service excellence, we have more exciting initiatives to come.”

Rousseau said that: “Our quarterly EBITDA exceeded our expectations and turned positive for the first time in seven quarters, cash flow from operations remained positive and accelerated from the third quarter, and we ended the year with $10.4 billion in unrestricted liquidity, an increase of $2.3 billion, or about 29% from the start of the year. We grew our capacity 26% from the previous quarter, while continuing to successfully manage load factor and yields in the right direction. Prior to Omicron’s onset, ticket sales reached 65% of pre-pandemic levels in October and November. These are all encouraging indicators.”

And he continued: “Moreover, robust advance ticket sales, which grew almost $400 million in the quarter, give us confidence that our customers will keep returning and that Omicron’s effect on our business is travel deferred, not cancelled. Our other lines of business thrived throughout the year, Air Canada Cargo’s record annual revenue of nearly $1.5 billion exceeded $1 billion for the first time, reaching $490 million in the fourth quarter of 2021, our transformed Aeroplan program reported strong billings, and Air Canada Vacations bookings sharply rebounded.”

Rousseau pointed out that: “There are other unmistakable signs of revival. We have been actively restoring our network, with 118 stations served at the end of 2021 up from 70 at its start, and the average number of daily flights rising to 665 in December 2021 from 245 in January 2021. We have been advancing ESG initiatives, including those related to the environment and diversity. And, most importantly, we have recalled over 10,000 colleagues, including 3,900 in the fourth quarter, and we have also begun hiring new employees.”

Rousseau said: “As we move into 2022, all expectations are that the recovery in air travel will continue, albeit unevenly. Nonetheless, we believe the regeneration of our business will gain momentum. To this end, we are working cooperatively with governments as they look to adapt their policies, based on science, and taking into account the significant health and safety measures Air Canada and the airline industry have implemented, to allow Canada to capture the economic benefits of the global recovery from the COVID-19 pandemic, many of which will be derived from increased trade and travel.”