MONTRÉAL — Air Canada has reported full year adjusted net income of $531 million in 2014 compared to $340 million in 2013, an improvement of $191 million.
“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% year-over-year. EBITDAR increased 16.6% 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.”
In 2014, on capacity growth of 7.8%, system passenger revenues of $11.804 billion increased $783 million or 7.1% from 2013. The increase in system passenger revenues was mainly due to traffic growth of 8.5% partly offset by a yield decline of 1.3%. An increase in average stage length of 2.3% 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% 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% on yield growth.
In 2014, operating expenses of $12.457 billion increased $694 million or 6% from 2013 on capacity growth of 7.8%. The unfavourable impact of a weaker Canadian dollar on foreign currency denominated operating expenses (mainly U.S. dollars) in 2014, when compared to 2013, increased operating expenses by approximately $397 million.
In 2014, Air Canada recorded operating income of $815 million compared to operating income of $619 million in 2013, an improvement of $196 million or 31.7%.
In the fourth quarter of 2014, on capacity growth of 8.5%, system passenger revenues of $2.755 billion increased $195 million or 7.6% from the fourth quarter of 2013. The increase in system passenger revenues was due to traffic growth of 9.4% partly offset by a yield decline of 1.9%.
In the fourth quarter of 2014, Air Canada recorded operating income of $106 million compared to operating income of $135 million in the fourth quarter of 2013, a decrease of $29 million. In the fourth quarter of 2013, Air Canada recorded a reduction of $82 million in operating expenses related to benefit plan amendments while no such adjustment was recorded in the fourth quarter of 2014.
For the fourth quarter of 2014, adjusted net income of $67 million increased $64 million from the same quarter of 2013.