Air Canada T.AC

Alternate Symbol(s): ACDVF

Industrials Airlines

Air Canada is an airline company. The Company is a provider of scheduled passenger services in the Canadian market, the Canada-United States (U.S.) transborder market and the international market to and from Canada. It provides scheduled service directly to more than 180 airports in Canada, the United States and internationally on six continents. The Company’s Aeroplan program is Canada's premier travel loyalty program, where members can earn or redeem points on the airline partner network of 45 airlines, plus through a range of merchandise, hotel and car rental rewards. Its freight division, Air Canada Cargo, provides air freight lift and connectivity to hundreds of destinations across six continents using its passenger and freighter aircraft. Its Air Canada Vacations is a tour operator, which is engaged in developing, marketing, and distributing vacation travel packages in the outbound/inbound leisure travel market. Air Canada Rouge is Air Canada's leisure carrier.

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Air Canada > 2023 results: A quick analysis

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Comment by JuIieRichardson Feb 16, 2024 3:32pm

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Post# 35884910

RE:2023 results: A quick analysis

Here we go:

Rouge10 wrote:
Quick analysis how the results compared to estimates

Estimates (from previous post) Actuals
Revenue: $22.0B $21.8B
EBITDA: $4.2B $3.98B
Cash flow from ops:   $4.3B $4.32B
Free cash flow: $2.7B ($7.5/share) $2.76B
EPS:   ~$6.0 (Q4: ~$1.0) $5.96 (Q4: ~0.4)
Leverage ratio:             1.1 1.1
Net debt                       $4.6B (diff post) $4.6B

Even though yield is lower than I had expected but load factor was higher than what I had assumed. Filling the seats with slightly cheaper seats. There is a science in maximizing total profit by selling more if yields are lower. Both work without adding aircraft capacity.

Most metrics came close as expected. EBITDA came slightly lower but CFO and FCF are higher than I had calculated. To me FCF is most important metric. Keep in mind that Q4 is the weakest Q for the airline always and yields usually are lower. In today’s call management was confident of demand volume and yields being similar to 2023. Q1 is half done. They won’t make such a statement if they are not confident of at least near term (Q1 and Q2) trends. Net debt will drop fast in coming months and so will Leverage Ratio. Management was very confident about consistent FCF even through the 2025-2027 high capex years.

2024 is going strong and will be able to come on top end of their guidance. AC won’t be able to come out very strong till pilot negotiations are going on.

I will be back with Q1 and 2024 numbers after reviewing data from today’s call.