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Air Canada reports record 2014 results
MONTRÉAL, Canada - Air Canada today reported full year adjusted net income of $531 million or $1.81 per diluted share compared to adjusted net income of $340 million or $1.20 per diluted share in 2013, an improvement of $191 million or $0.61 per diluted share. EBITDAR(1) (earnings before interest, taxes, depreciation, amortization and aircraft rent) amounted to $1.671 billion compared to EBITDAR (excluding the impact of benefit plan amendments) of $1.433 billion in 2013, an improvement of $238 million or 16.6 percent. On a GAAP basis, Air Canada reported 2014 operating income of $815 million, an increase of $196 million or 31.7 percent from 2013. The airline reported net income of $105 million or $0.34 per diluted share in 2014 compared to net income of $10 million or $0.02 per diluted share in 2013.

"In 2014, Air Canada achieved its best full year financial performance in the Corporation's 77-year history," said Calin Rovinescu, President and Chief Executive Officer. "Adjusted net income was $531 million, representing an increase of 56.2 percent year-over-year. EBITDAR increased 16.6 per cent from the previous year. Fourth quarter EBITDAR of $319 million increased $42 million compared to EBITDAR for the previous year's quarter, excluding benefit plan amendments. We served almost three million more customers in 2014, or a total of 38.5 million including three million customers on rouge®. We recorded our highest system load factor ever as we continued to expand our widebody fleet and grow internationally. Air Canada's share price gained 60 per cent over the year, a more than six-fold increase in value since the start of 2013. Record results for a second consecutive year represent a significant step towards our goal of sustainable profitability, and allow us to pay out $46 million to employees through the profit sharing program, an increase of $15 million from the previous year.
"We continue to implement cost reduction and revenue-generating initiatives including profitable international growth and the strategic deployment of rouge® to compete in leisure markets. We remain focused on prudent capacity management and a pricing strategy based on market demand which, overall, has continued to remain strong into 2015. While fuel prices remain volatile, the recent decrease is expected to drive significant cost savings in 2015 and provides us with an opportunity to increase adjusted net income, reduce adjusted net debt and further strengthen our balance sheet. I would like to thank our 27,000 employees for their part in the accomplishments realized over the past year and for their continued focus on taking care of our customers as we work towards sustainable profitability in this highly competitive industry environment," concluded Mr. Rovinescu.

Full year Income Statement Highlights

In 2014, on capacity growth of 7.8 percent, system passenger revenues of $11.804 billion increased $783 million or 7.1 percent from 2013. The increase in system passenger revenues was mainly due to traffic growth of 8.5 per cent partly offset by a yield decline of 1.3 percent. An increase in average stage length of 2.3 percent versus 2013, reflecting international long-haul growth, had the effect of reducing yield by 1.3 percentage points. On a stage length adjusted basis, system yield was unchanged from 2013. Modest yield declines are an anticipated and natural consequence of the successful implementation of Air Canada's business strategy to profitably increase long-haul international and leisure flying.

Passenger revenue per available seat mile (PRASM) decreased 0.6 percent from 2013 as the lower yield was largely offset by a passenger load factor improvement of 0.6 percentage points. In 2014, system business cabin revenues increased $109 million or 4.9 percent on yield growth.


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