The budget carrier, Canada Jetlines has released its 2022 figures with show total operating revenues for the year were $3,326,824 as losses mount ever higher. The airline started operating scheduled flights from September 22, 2022, representing the firm's first revenues from the operation. During this period the Company operated charters and ACMI (Aircraft, Crew, Maintenance, and Insurance) flights generating $2.4 million, representing 72% of the total revenue for the year.
Summary of Annual Results
| December 31, 2022 | December 31, 2021 |
Revenue | $ 3,326,824 | $ - |
Income (loss) and comprehensive income (loss) | $ (13,438,121) | $ (3,100,717) |
Earnings (loss) per share (basic and diluted) | $ (0.22) | $ (0.07) |
Total assets | $ 27,289,573 | $ 5,236,914 |
Total liabilities | $ 28,948,171 | $ 1,068,599 |
Total operating expense of $15,940,511 million for the 2022 fiscal year increased from $3,392,470 compared to 2021. Increases were primarily driven by the airline commencing air service operations, as well as adding an additional aircraft during the year.
Total assets increased to $27,289,573 from $5,236,914 as at December 31, 2021. The increase in total assets compared to 2021 is primarily attributable to the capitalization of right of use assets associated with aircraft leases and increase in property and equipment.
Total liabilities increased to $28,948,171 from $1,068,599 as at December 31, 2021. The increase was made up of the liabilities associated with the two aircraft leases and increases in accounts payable and accrued liabilities explained by the timing of payments and invoices received at the end of the period.
Eddy Doyle, CEO of Jetlines commented: “We are pleased to report that several key milestones were achieved in 2022 that allowed Canada Jetlines to get airborne. In March 2022, Canada Jetlines received determination of Canadian ownership and control by the CTA (Canadian Transportation Agency) and in the month of May 2022 the CTA concluded that the company had sufficient funds to meet the CTA requirements to issue its commercial license once the Air Operator Certificate (AOC) would be issued by Transport Canada.”
Mr. Doyle continued: “During all of 2022, Canada Jetlines worked assiduously towards the goal of completing the extensive process of obtaining its AOC for commercial large aircraft operations and taking possession of its first Airbus 320 aircraft. In August 2022, after months of preparation and crew training while still dealing with residual challenges and restrictions caused by the pandemic, the Company was proud to be the first airline in over a decade to obtain a new AOC from Transport Canada to operate large aircraft such as its Airbus 320 aircraft.”
Mr. Doyle further added: “In September, the Company operated its first revenue flights from Toronto to Calgary and was also in position to apply for foreign operating authority. Having anticipated and prepared for the extensive process to obtain permission to operate scheduled service of large passenger aircraft to the USA, Canada Jetlines was able to meet all the FAA and Department of Homeland Security requirements in record time and was granted such rights before the end of 2022.”
Mr. Doyle concluded: “In November 2022 the Company completed its first charter flight and several ACMI flights for other carriers. The charter component of the business grew rapidly in December 2022 and with the entry into service of its second aircraft, Canada Jetlines fleet was being fully utilized throughout the month with most of its flights being composed of charter and ACMI lease contracts.”
The Company ended the year with $3.1 million in current assets, a decrease of $1 million compared to year end 2021. The decrease is mainly due to the drop in cash balance that was used for operating expenses.
Current liabilities increased from $821K in 2021 to $8.2 million, mainly due to an increase of $4.1 million in leased aircraft liabilities as the Company grew its fleet from zero aircraft in 2021 to two aircraft by December 2022. In addition, there is $761K in the current portion of a loan payable, $2.2 million of ground handling and other liabilities associated with the addition of two leased aircraft.
2023 Update
Mr. Doyle added: “In February 2023, the Company was proud to introduce Las Vegas as its first international scheduled destination, this was followed in March with a new route from Toronto to Cancun, Mexico. Charter flights and ACMI lease contracts continued to grow throughout the first quarter of 2023 and in March the Company announced it was chosen to provide an aircraft and crew for a 5-month ACMI contract beginning at the end of March, 2023.”
The airline will need to find some new finance during 2023 to survive the year and is looking at various options including convertible debt or equity in order to further invest in the business and facilitate the continued growth of the fleet, including the acquisition of additional leased aircraft, as well as additional working capital.