By John Flett
Air Canada Reports Positive Recovery Signs in Final Quarter of 2021
Air Canada has posted its 2021 financial year results that indicate a strong final quarter finish to the year with an unexpected positive EBITDA — a common proxy for operational profitability that stands for earnings before interest, taxes, depreciation and amortization — for the first time in seven quarters.
By comparison, 2020’s final quarter EBITDA was negative 728 million Canadian dolloars ($571 million) compared to 2021’s Q4 figure of 22 million Canadian dollars. In addition, the airline posted a full year 2021 operating loss of 3.049 billion Canadian dollars compared to an operating loss of 3.776 billion Canadian dollars in 2020.
“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,” Michael Rousseau, President and Chief Executive Officer of Air Canada, said in a statement. “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 reported an increase in capacity for Q4 2021 of 134% over Q4 2020 though down 47% from Q4 2019 levels. The airline’s overall capacity measured in available seat miles (ASM) for 2021 was down 11 percent over 2020 and 70 percent from 2019 levels indicating the challenges ahead for Canada’s aviation industry. However the airline plans “to increase its first-quarter 2022 ASM capacity by 243% from the same quarter in 2021. When compared to the same period in 2019, first quarter ASM capacity is expected to decrease by about 44%.”
Positive signs for the carrier came with record cargo revenues in 2021 of 1.495 billion Canadian dollars compared to 2020 cargo revenues of 920 million Canadian dollars. In 2021, the airline operated a total of 10,217 cargo-only flights compared to 4,235 cargo-only flights in 2020.
“Prior to Omicron’s onset, ticket sales reached 65 percent of pre-pandemic levels in October and November,” Rosseau said. “These are all encouraging indicators.”
Air Canada’s results come at the end of a week in which the Canadian government announced the relaxing of some testing requirements for inbound arrivals to Canada. Fully vaccinated travelers will be able to opt for a less expensive antigen test prior to departing for the country though the option of a PCR test 72 hours prior to departure remains.
Vaccinated passengers who may be selected for a random test upon arrival will now no longer have to self-isolate until receiving the results. In addition, international passenger flights will be permitted to land at all remaining Canadian airports that are designated by the Canada Border Services Agency to receive international passenger flights.