Air Canada Reports Mixed Q3 Performance, Adjustments 

DALLAS — Air Canada (AC) has reported its financial results for Q3 2024, marking a quarter of mixed financial performance amid strategic adjustments. 

Operating revenues reached C$6.1 billion, representing a 4% decline compared to last year, primarily due to a dip in passenger revenues. Operating income came in at C$1.04 billion, down by C$375 million from the previous year, with adjusted EBITDA at C$1.52 billion, a decrease of C$307 million.

Cash flow results showed a positive trend: cash flows from operations rose to C$737 million (a C$329 million increase), and free cash flow reached C$282 million, up by C$147 million year-over-year. AC’s leverage ratio improved to 1.0 by the end of Q3 2024, compared to 1.1 at the close of 2023, indicating progress in debt management.

Michael Rousseau, President and CEO, praised the company’s performance across key metrics, including an improved on-time rate and “strong” customer satisfaction, even with the complexities introduced by summer pilot negotiations. 

Notably, AC moved nearly 13 million passengers during the quarter, including safely transporting athletes to the Paris Olympics.

Air Canada also announced a share buyback program to enhance shareholder value, a strategic move to offset dilution from pandemic-related financing. The buyback, authorized by the Toronto Stock Exchange, allows the airline to repurchase up to 10% of its public float shares over the next year.

Air Canada adjusted its 2024 guidance, considering fluctuating jet fuel prices and contract adjustments. The updated outlook reflects a 5% increase in available seat miles (ASM) capacity over 2023 levels, slight reductions in adjusted CASM, and an improved EBITDA forecast of approximately C$3.5 billion. 

Our takeaway is that the Canadian flag carrier remains focused on balancing growth investments, debt reduction, and shareholder returns as part of its capital allocation plan. The carrier is also capitalizing on its push to attract U.S. travelers with its underrated Aeroplan loyalty program.

Further strategic details are expected at its upcoming Investor Day on December 17, 2024.