Air Canada reports record annual revenues in 2024 of $22.3 billion

MONTREAL – Air Canada reported its fourth quarter and full year 2024 financial results. “Air Canada achieved record annual revenues in 2024 of $22.3 billion on a five per cent increase in capacity over 2023.  We executed our plan, making adjustments where necessary, achieving nearly $3.6 billion in annual adjusted EBITDA and free cash flow of $1.3 billion. We also bought back for cancellation over 20 million shares in 2024 and over 15 million more in early 2025, completing the normal course issuer bid program we announced in November. We safely transported about 47 million passengers during the year, and I thank all Air Canada employees for their dedication to serving our customers with glowing-hearted hospitality,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

“2024 allowed us to demonstrate the wide-ranging strengths and adaptability of Air Canada. We adapted to market conditions and nimbly adjusted our network during the year.  We were pleased to achieve a new contract with our pilots with limited disruption. We also enhanced the customer experience through improved operations, including an eight-point gain in on-time performance over 2023 and ongoing fleet, product, technology, and airport investments.

“We are well positioned with a solid year behind us to leverage our competitive advantages, including our iconic brand, premium products, and global network, and to continue delivering on our plans. Our team has consistently proven its discipline, and we will continue to navigate uncertainty and external pressures with prudence and decisiveness. The demand environment remains favourable. We remain agile and responsive in our dynamic aviation industry and are prepared to adapt promptly to any changes or challenges that may arise,” said Mr. Rousseau.

The following is an overview of Air Canada’s results of operations and financial position for the fourth quarter and full year 2024 compared to the same periods in 2023.

Fourth Quarter 2024 Financial Results

• Record fourth quarter operating revenues of $5.404 billion increased $229 million or 4% on a 2% capacity growth.
• Operating expenses of $5.658 billion increased $562 million or 11%. The increase was largely due to a $490 million one-time charge in Q4 2024 for pension plan amendments linked to the new collective agreement with the Air Line Pilots Association (ALPA). Higher labour and maintenance costs also contributed to the increase.
• Operating loss of $254 million which included the one-time $490 million charge, versus operating income of $79 million in Q4 2023.
• Adjusted EBITDA of $696 million, with an adjusted EBITDA margin* of 12.9%, improved $175 million and 2.8 percentage points, respectively.
• Adjusted pre-tax income* of $135 million, increased $182 million.
• Net loss of $644 million and diluted loss per share of $1.81 compared to a net income of $184 million and diluted earnings per share of $0.41.
• Adjusted net income* of $93 million and adjusted earnings per diluted share of $0.25 compared to an adjusted net loss of $44 million and adjusted loss per diluted share of $0.12.
• Adjusted CASM* of 15.05 cents compared to 14.25 cents, an increase of 5.7%.
• Net cash flows from operating activities of $677 million decreased $308 million.
• Negative free cash flow of $495 million, compared to free cash flow of $669 million in Q4 2023.

Full Year 2024 Financial Summary

• Operating revenues of $22.255 billion increased $422 million or 2% on an operated capacity growth of 5% year over year. The capacity growth was in line with expectations communicated in Air Canada’s news release dated December 17, 2024.
• Operating expenses of $20.992 billion increased $1.438 billion or 7%. The increase was largely due to higher costs in most line items due to capacity growth, higher labour, maintenance and IT expenses and the one-time $490 million charge recorded in the fourth quarter of 2024.
• Operating income of $1.263 billion, with an operating margin of 5.7%, decreased $1.016 billion and 4.7 percentage points, respectively.
• Adjusted EBITDA of $3.586 billion, with an adjusted EBITDA margin of 16.1%., decreased $396 million and 2.1 percentage points, respectively, somewhat above the expected adjusted EBITDA of approximately $3.5 billion communicated in Air Canada’s news release dated December 17, 2024.
• Adjusted pre-tax income of $1.397 billion, decreased $296 million.
• Net income of $1.720 billion and diluted earnings per share of $4.72 compared to a net income of $2.276 billion and diluted earnings per share of $5.96 in 2023. Net income in 2024 included the recognition of $1.154 billion of previously unrecognized deferred income tax assets.
• Adjusted net income of $1.335 billion and adjusted earnings per diluted share of $3.55 compared to an adjusted net income of $1.713 billion and adjusted earnings per diluted share of $4.56.
• Adjusted CASM of 13.80 cents compared to 13.49 cents, an increase of 2.3%, in line with the expectations communicated in Air Canada’s news release dated December 17, 2024.
• Net cash flows from operating activities of $3.930 billion decreased $390 million.
• Free cash flow of $1.294 billion decreased $1.462 billion.
• Net debt-to-adjusted EBITDA ratio was 1.4 as at December 31, 2024, compared to 1.1 as at December 31, 2023.

Outlook

For the full year 2025, Air Canada is maintaining its guidance and its major assumptions. Full year 2025 guidance is as follows:

Major Assumptions

Air Canada made assumptions in providing its guidance – including moderate Canadian GDP growth for 2025. Air Canada also assumes that the Canadian dollar will trade, on average, at C$1.40 per U.S. dollar for the full year 2025 and that the price of jet fuel will average C$0.95 per litre for the full year 2025.

Air Canada’s guidance constitutes forward-looking information within the meaning of applicable securities laws and is subject to important risks and uncertainties, including in relation to the potential impact of statements or actions by governments relating to the imposition of (or threats to impose) tariffs on exports or imports, and related consequences. Please see the discussion below under Caution Regarding Forward-looking Information.

2028 Targets

On December 17, 2024, Air Canada announced its long-term 2028 financial targets and 2030 aspirations described below:

The 2028 long-term targets and 2030 aspirations provided in this news release do not constitute guidance or outlook but rather are provided for the purpose of assisting the reader in measuring progress toward Air Canada’s objectives. The reader is cautioned that using this information for other purposes may be inappropriate. Air Canada may review and revise these targets and aspirations including as economic, geopolitical, market and regulatory environments change. These targets and aspirations are used as goals as Air Canada executes on its strategic priorities, and they assume a normal business environment. Air Canada’s ability to achieve these targets and aspirations is also dependent on its success in achieving initiatives and business objectives that are described in Air Canada’s 2024 Investor Day presentations, which are available at aircanada.com/investors, including, but not limited to, those relating to increasing revenues, growing fleet and network capacity, and successfully executing on other key investments and initiatives, as well as other major assumptions, including those described in this news release, and are subject to a number of risks and uncertainties.

The article Air Canada reports record annual revenues in 2024 of $22.3 billion first appeared in TravelDailyNews International.