Air Canada Reports Record Second Quarter 2014 Results
Air Canada today reported second quarter adjusted net income of $139 million or $0.47
per diluted share compared to adjusted net income of $115 million or $0.41 per diluted share in the second quarter of 2013, an improvement of $24 million or 21 per cent. EBITDAR (1) earnings before interest, taxes, depreciation, amortization and impairment, and aircraft rent amounted to $456 million compared to EBITDAR of $385 million in the second quarter of 2013. On a GAAP basis, Air Canada reported net income of $223 million or $0.75 per diluted share in the second quarter of 2014 compared to a net loss of $23 million or $0.09 per diluted share in the second quarter of 2013. Air Canada's second quarter 2014 EBITDAR and GAAP net income results included favourable tax related provision adjustments of $41 million. These provisions are excluded from Air Canada's adjusted results.
I am pleased to report that Air Canada delivered its best second quarter financial performance in the Corporation's history, surpassing last year's records in all three measures of operating income, adjusted net income and EBITDAR, said Calin Rovinescu, President and Chief Executive Officer. These results underline the significant incremental progress being achieved through our various value enhancing strategies, as they continue to be implemented.
In addition to seeing good year over year revenue growth in all of our five markets, we have also seen a marked increase in the number of International and U.S.originating customers choosing Air Canada for their global travel plans. Investments by Air Canada and our industry partners to provide a seamless transfer experience at Canada's major hubs are starting to show results. The performance of Air Canada rougeTM has exceeded expectations and allows Air Canada to now compete more effectively in leisure markets on a more cost effective basis.Combined with Air Canada's other cost transformation strategies, adjusted CASM decreased 4.7 per cent from the previous year's quarter.
During the quarter, Air Canada took delivery of the first two of 37 firm orders for the Boeing Dreamliner 787 Aircraft and a third since, in July. The renewal of our International fleet with these next generation Aircraft will provide us with significant improvements in fuel efficiency and allow us to offer customers superior comfort and amenities. We look forward to realizing the full benefits of our International fleet renewal as new Aircraft enter the mainline fleet.
I am especially pleased that once again International air travellers surveyed by the Independent UK based research firm, Skytrax, selected Air Canada as Best Airline in North America for the fifth year in a row. This honour recognizes the professionalism of our employees and their commitment to taking care of our customers, as well as our investment in providing an award winning product on board our Aircraft and on the ground.
Looking ahead, we remain focused on maintaining the momentum to transform Air Canada into an increasingly profitable company for our shareholders and employees, and executing on our four core priorities: cost transformation, international growth, customer engagement and culture change,concluded Mr. Rovinescu.
Second Quarter Income Statement Highlights
System passenger revenues amounted to $2,965 million, an increase of $208 million or 7.5 per cent from the second quarter of 2013, on a 9.9 per cent growth in traffic as yield declined 2.1 per cent year over year. Average stage length, on a system-basis, increased 2.5 percent from the same quarter of 2013 and had the effect of reducing yield by 1.5 percentage points. Passenger revenue per available seat mile (PRASM) decreased 0.8 per cent from the same quarter in 2013 on the lower yield as passenger load factor improved 1.1 percentage points. In the second quarter of 2014, system premium cabin revenues increased $14 million or 2.4 per cent on yield growth of 3.6 per cent partly offset by a traffic decline of 1.2 per cent.
Operating expenses amounted to $3,060 million, an increase of $177 million or 6 per cent from the second quarter of 2013 on an 8.5 per cent increase in capacity. Included in Other operating expenses in the second quarter of 2014 were favourable tax-related provision adjustments of $41 million. The unfavourable impact of a weaker Canadian dollar on foreign currency denominated operating expenses (mainly U.S. dollars), when compared to same quarter in 2013, increased operating expenses by $110 million. This unfavourable currency impact on operating expenses was partially offset by a favourable currency impact on passenger revenues of $70 million.
Air Canada's adjusted cost per available seat mile (adjusted CASM(1)), which excludes fuel expense, the cost of ground packages at Air Canada VacationsTM and unusual items, decreased 4.7 per cent compared to the second quarter of 2013. The 4.7 per cent reduction in adjusted CASM surpassed the adjusted CASM decrease of 3.5 to 4.5 per cent projected in Air Canada's news release dated May 15, 2014, largely the result of ASM capacity coming at the top end of the expected range and a slight improvement in the value of the Canadian dollar versus what Air Canada assumed in its May 15, 2014 projections.
In the second quarter of 2014, Air Canada recorded operating income of $245 million compared to operating income of $174 million in the second quarter of 2013, an improvement of $71 million. Air Canada's second quarter 2014 operating income results included favourable tax related provision adjustments of $41 millio
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Air Canada today reported second quarter adjusted net income of $139 million or $0.47
per diluted share compared to adjusted net income of $115 million or $0.41 per diluted share in the second quarter of 2013, an improvement of $24 million or 21 per cent. EBITDAR (1) earnings before interest, taxes, depreciation, amortization and impairment, and aircraft rent amounted to $456 million compared to EBITDAR of $385 million in the second quarter of 2013. On a GAAP basis, Air Canada reported net income of $223 million or $0.75 per diluted share in the second quarter of 2014 compared to a net loss of $23 million or $0.09 per diluted share in the second quarter of 2013. Air Canada's second quarter 2014 EBITDAR and GAAP net income results included favourable tax related provision adjustments of $41 million. These provisions are excluded from Air Canada's adjusted results.
I am pleased to report that Air Canada delivered its best second quarter financial performance in the Corporation's history, surpassing last year's records in all three measures of operating income, adjusted net income and EBITDAR, said Calin Rovinescu, President and Chief Executive Officer. These results underline the significant incremental progress being achieved through our various value enhancing strategies, as they continue to be implemented.
In addition to seeing good year over year revenue growth in all of our five markets, we have also seen a marked increase in the number of International and U.S.originating customers choosing Air Canada for their global travel plans. Investments by Air Canada and our industry partners to provide a seamless transfer experience at Canada's major hubs are starting to show results. The performance of Air Canada rougeTM has exceeded expectations and allows Air Canada to now compete more effectively in leisure markets on a more cost effective basis.Combined with Air Canada's other cost transformation strategies, adjusted CASM decreased 4.7 per cent from the previous year's quarter.
During the quarter, Air Canada took delivery of the first two of 37 firm orders for the Boeing Dreamliner 787 Aircraft and a third since, in July. The renewal of our International fleet with these next generation Aircraft will provide us with significant improvements in fuel efficiency and allow us to offer customers superior comfort and amenities. We look forward to realizing the full benefits of our International fleet renewal as new Aircraft enter the mainline fleet.
I am especially pleased that once again International air travellers surveyed by the Independent UK based research firm, Skytrax, selected Air Canada as Best Airline in North America for the fifth year in a row. This honour recognizes the professionalism of our employees and their commitment to taking care of our customers, as well as our investment in providing an award winning product on board our Aircraft and on the ground.
Looking ahead, we remain focused on maintaining the momentum to transform Air Canada into an increasingly profitable company for our shareholders and employees, and executing on our four core priorities: cost transformation, international growth, customer engagement and culture change,concluded Mr. Rovinescu.
Second Quarter Income Statement Highlights
System passenger revenues amounted to $2,965 million, an increase of $208 million or 7.5 per cent from the second quarter of 2013, on a 9.9 per cent growth in traffic as yield declined 2.1 per cent year over year. Average stage length, on a system-basis, increased 2.5 percent from the same quarter of 2013 and had the effect of reducing yield by 1.5 percentage points. Passenger revenue per available seat mile (PRASM) decreased 0.8 per cent from the same quarter in 2013 on the lower yield as passenger load factor improved 1.1 percentage points. In the second quarter of 2014, system premium cabin revenues increased $14 million or 2.4 per cent on yield growth of 3.6 per cent partly offset by a traffic decline of 1.2 per cent.
Operating expenses amounted to $3,060 million, an increase of $177 million or 6 per cent from the second quarter of 2013 on an 8.5 per cent increase in capacity. Included in Other operating expenses in the second quarter of 2014 were favourable tax-related provision adjustments of $41 million. The unfavourable impact of a weaker Canadian dollar on foreign currency denominated operating expenses (mainly U.S. dollars), when compared to same quarter in 2013, increased operating expenses by $110 million. This unfavourable currency impact on operating expenses was partially offset by a favourable currency impact on passenger revenues of $70 million.
Air Canada's adjusted cost per available seat mile (adjusted CASM(1)), which excludes fuel expense, the cost of ground packages at Air Canada VacationsTM and unusual items, decreased 4.7 per cent compared to the second quarter of 2013. The 4.7 per cent reduction in adjusted CASM surpassed the adjusted CASM decrease of 3.5 to 4.5 per cent projected in Air Canada's news release dated May 15, 2014, largely the result of ASM capacity coming at the top end of the expected range and a slight improvement in the value of the Canadian dollar versus what Air Canada assumed in its May 15, 2014 projections.
In the second quarter of 2014, Air Canada recorded operating income of $245 million compared to operating income of $174 million in the second quarter of 2013, an improvement of $71 million. Air Canada's second quarter 2014 operating income results included favourable tax related provision adjustments of $41 millio
Canadian Aviation News,
Canadian Aviation Authority,
Canadian Aviation Regulations,
Canadian Aircraft,
Canada Aviation Museum Ottawa,
Jazz Aviation Canada,
Western Canada Aviation Museum,
Transport Canada Aviation Regulations,
Mohini Porwal [ B Sc]
Trainee News Editor
Canada Aviation News Editor
www.Canadian-Aviation-News.blogspot.com
mohini.aerosoft@gmail.com
https://www.facebook.com/profile.php?id=100005944964687
www.AeroSoft.co.in
www.Philippine-Aviation-News.blogspot.com
www.Newzealand-Aviation-News.blogspot.com
www.Aviation-News-India.blogspot.com
www.Aviation-News-Canada.blogspot.com
www.Aviation-News-Australia.blogspot.com
www.Aviation-News-USA.blogspot.com
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