Air Canada reports March traffic results

For the month of March, Air Canada reported a system wide traffic growth of 1.4 per cent on a capacity increase of 3.6 per cent. Air Canada’s system load factor was 81.7 per cent, versus 83.5 per cent in March 2013, a decrease of 1.8 percentage points. Air Canada reports traffic results on a system-wide basis, including Air Canada rouge, which began operations on July 1, 2013, and regional airlines from which Air Canada purchases capacity. 

“I am pleased to report solid traffic growth and a load factor of 81.7 per cent for the month of March,” said Calin Rovinescu, president and chief executive officer.  “For the month, traffic grew overall by 1.4 per cent led by the U.S. transborder market, and for the quarter traffic grew 2.9 per cent with increases in all markets Air Canada serves.  During the first quarter, we continued to execute our priorities to build a sustainably profitable airline. Based on the ongoing positive results of our cost transformation and revenue enhancement initiatives, we now expect EBITDAR for the first quarter to be in line with last year’s level for the same period. In addition, based on forward bookings, we expect a strong summer travel season ahead. I would like to thank our employees for their hard work and transporting our customers safely to their destinations despite the ongoing challenges of severe winter weather during the month and the quarter.” 

Further to the initial projections regarding the first quarter EBITDAR provided by Air Canada in its Feb. 12, 2014 press release, Air Canada now expects its first quarter 2014 EBITDAR to be in line with last year’s level.  The expected improvement in the first quarter 2014 EBITDAR (compared to the $15-$30 million shortfall to last year’s level projected in the Feb. 12, 2014 press release) is the result of both higher revenue and RASM performance, as well as a better CASM performance than originally projected. 

For the first quarter of 2014, based on preliminary results, Air Canada reported system ASM capacity growth of 3.8 per cent, compared to the first quarter of 2013, which was at the lower end of the range of the 3.5 to 4.5 per cent increase projected in its Feb. 12, 2014 press release.  Air Canada now projects full year 2014 ASM capacity growth of 6.5 to 8.0 per cent when compared to the full year 2013 (as compared to 7 to 9 percent growth projected in its Feb. 12, 2014 press release).  Domestic Canada ASM growth for 2014 is now projected at between 3.0 and 4.0 per cent (as compared to 3.5 to 4.5 per cent growth projected in Air Canada’s Feb. 12, 2014 press release).  The projected reduction in both annual system and domestic ASM growth is the result of various minor network adjustments. 

In the first quarter of 2014, Air Canada now expects adjusted CASM to have decreased in the range of 2.0 to 2.5 per cent when compared to the first quarter of 2013 (as opposed to the 1.0 to 2.0 percent decrease projected in its Feb. 12, 2014 press release).  This projected improvement in adjusted CASM results from various additional cost reduction initiatives executed in the quarter designed to mitigate the impact of the Canadian dollar and severe weather conditions.  For the full year 2014, Air Canada continues to expect adjusted CASM to decrease 2.5 to 3.5 per cent when compared to the full year 2013. 

Air Canada’s outlook assumes Canadian GDP growth of 2.0 to 3.0 per cent for 2014. Air Canada’s outlook also assumes that the Canadian dollar will trade, on average at $1.10 per U.S. dollar in the first quarter of 2014 and $1.11 per U.S. dollar for the full year 2014 and that the price of jet fuel will average 95 cents per litre for the first quarter of 2014 and 91 cents per litre for the full year 2014. 

All financial figures reported with respect to the first quarter of 2014 are preliminary estimates only, have not been reviewed by Air Canada’s auditors and are subject to change as Air Canada’s first quarter 2014 financial results are finalized.  The outlook and preliminary estimates provided in this press release constitute forward-looking statements within the meaning of applicable securities laws, are based on a number of assumptions and are subject to a number of risks and uncertainties.