Air Canada reported a 24 percent decline in cargo revenue at C$215 million for the third quarter of 2023 compared to C$281 million in Q32022, primarily on lower yields in all markets resulting from continued softness in demand for air cargo services.
For the first nine months of 2023, cargo revenue was down 30 percent at C$680 million as against C$978 million during the same period last year.
“The decline was due to continued softness in volume and yield in all markets and to the return of temporarily converted passenger aircraft to passenger operations through the end of the second quarter of 2022. Increased freighter operations to Central and South America and to Europe partially offset the year-over-year decline.”
Pacific revenue dropped sharply – 54 percent – during the first nine months to C$157 million from C$343 million during the same period of 2022. Operating revenue for Q32023 increased 19 percent to C$6.3 billion and operating income more than doubled to C$1.4 billion. Adjusted net income zoomed to C$1.3 billion from C$431 million in Q32022.
For the first nine months, operating revenue was up 40 percent at C$16.6 billion, and adjusted net income came in at C$1.7 billion as against a loss of $771 million during the same period last year.
“Air Canada performed strongly in the third quarter, generating solid operating revenues of more than $6.3 billion, a 19 percent increase over the same period last year,” says Michael Rousseau, President and Chief Executive Officer, Air Canada. “Our focus on growing our international network, building scale at our hubs, and leveraging our solid partnerships is delivering strong results. Our operating income reached $1.4 billion, more than double from a year ago, and adjusted EBITDA grew by $773 million to $1.83 billion, representing an adjusted EBITDA margin of nearly 29 percent.
I thank our employees and management team for their hard work in safely transporting 12.6 million customers during the busy and demanding summer season. We managed costs prudently with operating expenses rising five percent on a 10 percent increase in capacity. We have continued to pay down debt in the quarter, lowering our leverage ratio to 1.4 from 5.1 at the end of last year while also maintaining a healthy level of liquidity, which stood at nearly $10 billion at the quarter’s end.”
Air Canada has maintained its EBITDA guidance for the full year at C$3.75-4 billion as provided on August 11, 2023.