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Canada Jetlines Operations Ltd. today reported full year 2022 annual financial results. All financial figures are in Canadian dollars and in accordance with IFRS as presented in the annual consolidated financial statements.
Full Year 2022 Financial Results
Total operating revenues for the 2022 year were $3,326,824. The Company started operating scheduled flights from September 22, 2022, representing the Company’s first revenues from operation. During this period the Company operated charters and ACMI (Aircraft, Crew, Maintenance, and Insurance) flights generating $2.4 million, representing 72% of the total revenue for the year.
Total operating expense of $15,940,511 million for the 2022 fiscal year increased from $3,392,470 compared to 2021. Increases were primarily driven by the airline commencing air service operations, as well as adding an additional aircraft during the year.
Total assets increased to $27,289,573 from $5,236,914 as at December 31, 2021. The increase in total assets compared to 2021 is primarily attributable to the capitalization of right of use assets associated with aircraft leases and increase in property and equipment.
Total liabilities increased to $28,948,171 from $1,068,599 as at December 31, 2021. The increase was made up of the liabilities associated with the two aircraft leases and increases in accounts payable and accrued liabilities explained by the timing of payments and invoices received at the end of the period.
Management Commentary
Eddy Doyle, CEO of Jetlines commented: “We are pleased to report that several key milestones were achieved in 2022 that allowed Canada Jetlines to get airborne. In March 2022, Canada Jetlines received determination of Canadian ownership and control by the CTA (Canadian Transportation Agency) and in the month of May 2022 the CTA concluded that the company had sufficient funds to meet the CTA requirements to issue its commercial license once the Air Operator Certificate (AOC) would be issued by Transport Canada.”
Mr. Doyle continued: “During all of 2022, Canada Jetlines worked assiduously towards the goal of completing the extensive process of obtaining its AOC for commercial large aircraft operations and taking possession of its first Airbus 320 aircraft. In August 2022, after months of preparation and crew training while still dealing with residual challenges and restrictions caused by the pandemic, the Company was proud to be the first airline in over a decade to obtain a new AOC from Transport Canada to operate large aircraft such as its Airbus 320 aircraft.”
Mr. Doyle further added: “In September, the Company operated its first revenue flights from Toronto to Calgary and was also in position to apply for foreign operating authority. Having anticipated and prepared for the extensive process to obtain permission to operate scheduled service of large passenger aircraft to the USA, Canada Jetlines was able to meet all the FAA and Department of Homeland Security requirements in record time and was granted such rights before the end of 2022.”
Mr. Doyle concluded: “In November 2022 the Company completed its first charter flight and several ACMI flights for other carriers. The charter component of the business grew rapidly in December 2022 and with the entry into service of its second aircraft, Canada Jetlines fleet was being fully utilized throughout the month with most of its flights being composed of charter and ACMI lease contracts.”
2023 Update
Mr. Doyle added: “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.”
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 travelers access to Qatar Airways’ unparalleled network via Doha to destinations in the Middle East, Africa, Indian Subcontinent and across Asia. Canada Jetlines intends to add two or more additional aircraft to its fleet in 2023 and continue to grow its schedule and Charter/ACMI business.
Liquidity
The Company ended the year with $3.1 million in current assets, a decrease of $1 million compared to year end 2021. The decrease is mainly due to the drop in cash balance that was used for operating expenses.
Current liabilities increased from $821K in 2021 to $8.2 million, mainly due to an increase of $4.1 million in leased aircraft liabilities as the Company grew its fleet from zero aircraft in 2021 to two aircraft by December 2022. In addition, there is $761K in the current portion of a loan payable, $2.2 million of ground handling and other liabilities associated with the addition of two leased aircraft.
Based on the Company’s working capital position, the Company will need to raise additional capital during the next twelve months and beyond to support its business plan. The Company 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.
This news release should be read in conjunction with Canada Jetlines’ audited 2022 Financial Statements and Management’s Discussion and Analysis available at www.sedar.com.
This press release was prepared and distributed by Canada Jetlines
