Air Canada posts $184M Q4 profit; pilots see progress in contract talks

Air Canada released its fourth quarter results on Friday (Feb. 16), reporting a profit of $184 million, up from $168 million a year earlier, with operating revenue rising 11 per cent.

In a statement, Michael Rousseau, Air Canada’s president and CEO, said the airline not only had a strong Q4, but also a successful 2023, delivering on key financial goals and priorities.

For the full year, Air Canada saw record operating revenues of $21.8 billion, up 32 per cent from 2022, as demand for air travel remained strong, Mr. Rousseau said.

Annual operating income was $2.3 billion – a $2.5 billion improvement from the previous year – and its adjusted EBITDA was nearly $4 billion, more than twice that of full year 2022.

“These results stem from the effective management, hard work and customer centric approach of everyone at Air Canada,” Rousseau said, thanking the team. “The focus on operational improvements was evident as, even with the growth in traffic and ongoing supply chain challenges, our key operational metrics and customer satisfaction improved year over year," he said.

For Q4, Air Canada’s operating revenue totalled $5.18 billion, up from $4.68 billion for the same period last year.

The increase came as the airline’s capacity increased nine per cent over 2022.

Operating expenses increased eight per cent due to higher costs reflecting the higher capacity and traffic, and it was partially offset by lower jet fuel prices.

On an adjusted basis, the airline says it lost 12 cents per diluted share in Q4, compared with an adjusted loss of 61 cents per diluted share a year earlier.

Looking ahead, for the first quarter of 2024, Air Canada plans to increase its capacity by about 10 per cent from the same quarter in 2023.

Aeroplan growth will continue

Rousseau added that Air Canada took “important steps” during the year to improve its operations and customer service levels, all the while strengthening its balance sheet and reducing debt.

He said Air Canada will continue to expand its Aeroplan loyalty program, calling it a “a key driver of customer loyalty that has doubled its membership to eight million members over the last five years.”

"Our airline remains adaptable to changing business conditions, and is poised to take advantage of opportunities, giving us every confidence for the year ahead,” he said. “As we look into the future, we aim to grow, deliver on our financial objectives and create long-term value for all stakeholders."

Pilot talks progress

Meanwhile, Air Canada’s pilots say they are seeing progress in contract talks after a private independent mediator was hired to bridge gaps with the airline over pay and quality-of-life demands, a union representative said on Thursday (Feb. 15).

As reported by Reuters, the Air Line Pilots Association (ALPA), which represents the pilots, are seeking to narrow a wage gap with higher-paid U.S. counterparts, who landed record contracts last year amid strong demand for air travel. 

Air Canada says its goal is to give its pilots a good deal.

Currently, an agreement reached with pilots in January commits both sides to mediation until June 1, Air Canada says, with both sides agreeing to not file for conciliation, a process that could lead to a possible strike.

"This gives Air Canada customers certainty and the ability to book with full confidence for the important summer travel period," Air Canada told Reuters.

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