Canada Jetlines has released details of its first quarter 2023 interim financial results, which show the fledgling budget carrier's revenues were a surprising $5.1 million as compared to $3.2 million in the quarter that ended December 31, 2022.
The airline hasn't made many inroads into the domestic travel market and has found that offering wet-lease charters more financially beneficial, the operations of charters and ACMI (Aircraft, Crew, Maintenance, and Insurance) flights generating revenues of $3.38 million this quarter as compared to $2.4 million in the prior quarter.
Canada Jetlines reports its total operating expenses were $8.15 million, up 21% from the prior quarter and a result of flying two aircraft for the entire quarter and the net loss was $3,618,816.
Total liabilities increased to $33,351,536 from $28,948,171 as of December 31, 2022. The increase was made up of the liabilities associated with an increase in deferred revenue and increases in accounts payable and accrued liabilities, explained by the timing of payments and invoices received at the end of the period. All financial figures are in Canadian dollars and in accordance with IFRS as presented in the annual consolidated financial statements.
Eddy Doyle, CEO and President of Jetlines commented: “We are pleased to report that several key milestones were achieved in Q1 2023, 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.”
Doyle continued: “In March, Canada Jetlines announced it was in discussion with Qatar Airways for a potential codeshare agreement where Canada Jetlines would provide service between Toronto and Doha, subject to government approval and completing all applicable agreements between the two airlines. This would offer Canadian travellers access to Qatar Airways' unparalleled network via Doha to destinations in the Middle East, Africa, Indian Subcontinent and across Asia. The Company is continuing to work through the Canadian government approval process and definitive documentation with Qatar Airways.”
Doyle concluded: “Looking forward, Canada Jetlines has recently announced a number of other charter contracts, including with two Canadian football teams. Canada Jetlines 3rd aircraft is expected to be delivered in July 2023 and the Company intends to add up to two additional aircraft to its fleet in 2023 and continue to grow its schedule and Charter/ACMI business.”
Based on Canada Jetline's working capital position, it will need to raise additional capital during the next twelve months and beyond to support its business plan. The firm is seeking additional capital in the form of debt, 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.
Summary of Quarterly Results
| March 31, 2023 | December 31, 2022 |
Revenue | $5,097,249 | $3,237,680 |
Income (loss) and comprehensive income (loss) | ($3,618,816) | ($4,528,552) |
Earnings (loss) per share (basic and diluted) | ($0.05) | ($0.06) |
Total assets | $28,336,094 | $27,289,573 |
Total liabilities | $33,351,536 | $28,948,171 |
On December 15, 2021, the Company entered into a definitive aircraft lease agreement with a third party for one Airbus A320 aircraft which was delivered in fiscal 2022. The lease payments began on February 28, 2022.
On October 14, 2022, the Company entered into a definitive aircraft lease agreement with a third party for one Airbus A320 aircraft which was delivered on November 28, 2022. The lease payments began on November 28, 2022.
A third aircraft for Canada Jetlines will be an Airbus A320-200 equipped with two CFM56-5B4/3 engines. The airline will install the Flymingo Box system, which offers an enhanced passenger experience through its wireless inflight entertainment. It is expected to be delivered in July 2023.
