Air Canada has released its fourth quarter and full year 2021 financial results, and the airline has finally squeaked out of pandemic red.
"Our quarterly EBITDA exceeded our expectations and turned positive for the first time in seven quarters,” Michael Rousseau, President and Chief Executive Officer of Air Canada revealed the positive news in a statement released on 18FEB prior to the company’s quarterly analysts’ call.
Air Canada’s fourth quarter 2021 EBITDA (earnings before interest, taxes, depreciation, and amortization) was $22 million compared to negative earnings of $728 million in the same quarter of 2020.
“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 per cent from the start of the year. We grew our capacity 26 per cent 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 per cent of pre-pandemic levels in October and November. These are all encouraging indicators,” added Rousseau.
"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.”
The company saw a distinct upturn in the last quarter of 2021:
- Fourth quarter 2021 operating revenues of $2.731 billion, 30 per cent 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 results weren’t enough to salvage the entire fiscal year, even though the airline performed much better in 2021 than in the first year of the pandemic.
- 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 of $1.464 billion compared to negative earnings of $2.043 billion in 2020
“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,” added Rousseau.
“I also thank our customers, including shippers, for their steadfast loyalty in continuing to choose Air Canada. 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 pointed out the airline benefitted from diversified sources of revenue other than commercial passenger transportation in 2021.
“Our other lines of business thrived throughout the year,” he pointed out.
“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.”
“Unmistakeable Signs of Revival”
The airline’s CEO went on to list other evidence the airline is finally rebounding from the pandemic, calling them “unmistakeable 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.
“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.”
Looking forward, Rousseau predicts, “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.”
He acknowledged COVID will remain a force to be reckoned with.
“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," said Mr. Rousseau.