Air Canada's first quarter results.......

Canada's largest airline Air Canada has released details of its latest performance for the first quarter of the year, which saw the carrier achieve operating revenues of $4.887 billion increased, up from $2.314 billion in the same quarter in 2022. The rise is primarily devised from higher passenger revenues due to increased travel demand across the Canadian travel market. 

Operating expenses rose up to $4.904 billion, 57% more than last year, mainly because of the 30% increase in the price of aviation fuel and the 83% increase in passenger numbers. The carrier's operating loss was $17 million and the adjusted net loss was $188 million improved $559 million from the first quarter of 2022. 

Michael Rousseau, President and Chief Executive Officer of Air Canada said:  "Air Canada's impressive first quarter performance reflects the strength of our brand, the very strong demand environment across all markets and the effective execution of our strategic plan. When compared to the same quarter in 2022, passenger revenues more than doubled and hit a first-quarter record of close to $4.1 billion, supported by our diversified network and our strong international franchise. Adjusted EBITDA surged by $554 million to $411 million, and our adjusted CASM* fell nearly seven per cent from a year ago" 

Rousseau continued: "Our first quarter financial results exceeded both internal and external expectations and we expect demand to persist, supported by strong advance bookings for the remainder of the year.  For this reason, as well as lower-than-expected fuel costs, we increased our 2023 adjusted EBITDA guidance last week. I thank all employees for their continued focus on improving all aspects of our company through effective and positive teamwork, and our customers for their loyalty.

"All areas of the business contributed meaningfully during the quarter. Air Canada Cargo is expanding its network and fleet, Aeroplan is gaining more members and gross billings have increased 50% when compared to the first quarter of 2022, and Air Canada Vacations produced remarkable results. System yields improved approximately 9 per cent compared to the first quarter of 2022. We achieved a strong free cash flow* of nearly $1 billion. This will allow us to continue investing in our future, including by further deleveraging our balance sheet," said Mr. Rousseau.

Read the annual report Here

(Canadian dollars in millions, except where indicated)	First Quarter
	2023		2022		Change
Operating expense – GAAP	$	4,904	$	3,123	$	1,781
Adjusted for:
Aircraft fuel		(1,375)		(750)		(625)
Ground package costs		(318)		(129)		(189)
Impairment of assets		-		(4)		4
Freighter costs (excluding fuel)		(31)		(11)		(20)
Operating expense, adjusted for the above-noted items	$	3,180	$	2,229	$	951
ASMs (millions)		21,907		14,297		53.2 %
Adjusted CASM (cents)	¢	14.52	¢	15.59	¢	(1.07)

EBITDA and Adjusted EBITDA

EBITDA, adjusted EBITDA and adjusted EBITDA margin are reconciled to GAAP operating income (loss) as follows:

	First Quarter
(Canadian dollars in millions, except where indicated)	2023		2022		Change
Operating loss – GAAP	$	(17)	$	(550)	$	533
Add back:
Depreciation and amortization		428		403		25
EBITDA	$	411	$	(147)	$	558
Remove:
Impairment of assets		-		4		(4)
Adjusted EBITDA	$	411	$	(143)	$	554
Operating revenues	$	4,887	$	2,573	$	2,314
Operating margin (%)		(0.3)		(21.4)		21.1 pp
Adjusted EBITDA margin (%)		8.4		(5.6)		14.0 pp

Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Share – Diluted

The financial and operating highlights for Air Canada for the periods indicated are as follows:

(Canadian dollars in millions, except per share data or where indicated)	First Quarter
Financial Performance Metrics	2023	2022	$ Change
Operating revenues	4,887	2,573	2,314
Operating loss	(17)	(550)	533
Operating margin (1) (%)	(0.3)	(21.4)	21.1 pp (8)
Adjusted EBITDA (2)	411	(143)	554
Adjusted EBITDA margin (2) (%)	8.4	(5.6)	14.0 pp
Loss before income taxes	(23)	(814)	791
Net income (loss)	4	(974)	978
Adjusted pre-tax loss (2)	(194)	(740)	546
Adjusted net loss (2)	(188)	(747)	559
Total liquidity (3)	10,543	10,361	182
Net cash flows from operating activities	1,437	367	1,070
Free cash flow (2)	987	91	896
Net debt (2)	6,532	7,031	(499)
Diluted loss per share	(0.03)	(2.72)	2.69
Adjusted loss per share – diluted (2)	(0.53)	(2.09)	1.56
Operating Statistics (5)	2023	2022	Change %
Revenue passenger miles (RPMs) (millions)	18,578	9,481	96.0
Available seat miles (ASMs) (millions)	21,907	14,297	53.2
Passenger load factor %	84.8 %	66.3 %	18.5 pp
Passenger revenue per RPM (Yield) (cents)	22.0	20.2	8.8
Passenger revenue per ASM (PRASM) (cents)	18.7	13.4	39.2
Operating revenue per ASM (TRASM) (cents)	22.3	18.0	23.9
Operating expense per ASM (CASM) (cents)	22.4	21.8	2.5
Adjusted CASM (cents) (2)	14.5	15.6	(6.9)
Average number of full-time-equivalent (FTE) employees (thousands) (5)	34.5	27.3	26.1
Aircraft in operating fleet at period-end (6)	352	332	6
Seats dispatched (thousands)	12,293	8,653	42.1
Aircraft frequencies (thousands)	85.2	65.0	31.0
Average stage length (miles) (7)	1,782	1,652	7.9
Fuel cost per litre (cents)	128.5	98.6	30.4
Fuel litres (thousands)	1,067,085	760,862	40.2
Revenue passengers carried (thousands) (7)	9,969	5,435	83.4

(1)	Operating margin is a supplementary financial measure and is defined as operating income (loss) as a percentage of operating revenues.
(2)	Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted EBITDA margin, adjusted pre-tax income (loss), adjusted net income (loss), free cash flow, net debt, adjusted earnings (loss) per share, and adjusted CASM are non-GAAP financial measures, capital management measures, non-GAAP ratios or supplementary financial measures. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. Refer to section "Non-GAAP Financial Measures" of this news release for descriptions of Air Canada's non-GAAP financial measures and for a quantitative reconciliation of Air Canada's non-GAAP financial measures to the most comparable GAAP measure.
(3)	Total liquidity refers to the sum of cash, cash equivalents, short and long-term investments, and the amounts available under Air Canada's credit facilities. Total liquidity, as at March 31, 2023, of $10,543 million consisted of $9,532 million in cash, cash equivalents, short and long-term investments and $1,011 million available under undrawn credit facilities. As at March 31, 2022, total liquidity of $10,361 million consisted of $9,411 million in cash and cash equivalents, short and long-term investments, and $950 million available under undrawn credit facilities. Cash and cash equivalents also include funds ($231 million as at March 31, 2023 and $199 million as at March 31, 2022) held in trust by Air Canada Vacations in accordance with regulatory requirements governing advance sales for tour operators.
(4)	Except for the reference to average number of FTE employees, operating statistics in this table include Jazz operating under its capacity purchase agreement with Air Canada.
(5)	Reflects average FTE employees at Air Canada and its subsidiaries, excluding FTE employees at Jazz operating under the capacity purchase agreements with Air Canada.
(6)	Average stage length is calculated by dividing the total number of available seat miles by the total number of seats dispatched.
(7)	Revenue passengers are counted on a flight number basis (rather than by journey/itinerary or by leg) which is consistent with the IATA definition of revenue passengers carried.
(8)	"pp" denotes percentage points and refers to a measure of the arithmetic difference between two percentages.