Summary
- Air Canada said its Q1 result was solid, with the airline growing its revenues in comparison with the identical period in 2023.
- The airline retained its full-year guidance, initially issued on February 16.
- While it plans to take delivery of 5 aircraft in 2024, its aircraft deliveries should peak in 2026 in the following five years.
Despite ending Q1 2024 with a minor loss, Air Canada described the quarter as with the airline expecting the present demand for travel to proceed. As well as, the carrier reiterated its full-year guidance without adjusting it upward or downward.
Healthy demand environment
Michael Rousseau, the President and chief executive officer (CEO) of Air Canada, said that the carrier’s Q1 was with the outcomes positioning the airline for a robust remainder of the yr. The corporate earned CAD5.2 billion ($3.8 billion) of revenue, with an operating income of CAD11 million ($8 million). Its net loss was CAD81 ($59.4 million).
Photo: Vincenzo Pace | Easy Flying
Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was CAD453 million ($332.3 million), an improvement of CAD42 million ($30.7 million) 12 months-on-12 months (YoY). The airline carried 10.7 million passengers, having deployed 24.3 billion available seat miles (ASM) in the course of the quarter. While passenger numbers grew 7.8%, Air Canada’s average load factor decreased by 0.5% to 84.3%.
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Retaining guidance
Nevertheless, Rousseau said the airline was confident in its ability to deliver on its full-year guidance. The chief said Air Canada continues to see a healthy demand environment for flights to Europe, Asia, and the rest of North America as consumers proceed to plan their summer holidays.
Photo: Minh K Tran | Shutterstock
The present full-year guidance indicated that Air Canada plans to extend its capability, namely ASMs, by 6% to eight% YoY, while its adjusted cost per available seat mile (CASM) should grow between 2.5% and 4.5% YoY.
Lastly, its adjusted EBITDA must be between CAD3.7 billion ($2.7 billion) and CAD4.2 billion ($3 billion). In 2023, Air Canada posted an adjusted EBITDA of CAD3.9 billion ($2.8 billion), with a margin of 18.2%. The guidance it reiterated was initially published to the general public on February 16.
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Gearing up for future aircraft deliveries
In its Q1 presentation for investors, the airline unveiled that it has an order book of 83 aircraft, which must be delivered in the following five years. As well as, Air Canada is currently working on finalizing lease agreements for an unidentified variety of Boeing 737 MAX aircraft that can enter service after they’re reconfigured in 2025. The 737 MAXs weren’t included in its order book.
Photo: Air Canada
Nevertheless, the carrier ended Q1 with 366 aircraft in its operating fleet, which doesn’t include assets that had remained unused in the course of the three-month period. Because of this, Air Canada deployed 13.4 million seats in Q1, a 9.7% increase YoY.
In 2024, it plans to take delivery of 5 aircraft: one Boeing 787-9, two Airbus A330-300, and two Airbus A220, with a planned capital expenditure (CapEx) of CAD2.1 billion ($1.5 billion) in the course of the yr. Nonetheless, Air Canada’s CapEx will grow to CAD3.4 billion ($2.4 billion) and CAD5.6 billion ($4.1 billion) in the course of the two subsequent years, with the airline planning to soak up 17 aircraft in 2025.
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