MONTRÉAL — Air Canada is reporting first quarter adjusted net income of $122 million compared to an adjusted net loss of $132 million in the first quarter of 2014, an improvement of $254 million.
On a GAAP basis, Air Canada reported operating income of $200 million in the first quarter of 2015 compared to an operating loss of $62 million in the first quarter of 2014, an improvement of $262 million.
“I am delighted to report the best first quarter financial performance in Air Canada’s history,” said Calin Rovinescu, President and Chief Executive Officer. “Record results in adjusted net income, operating income, operating margin, EBITDAR, passenger revenues and passenger load factor for the quarter all underscore our team’s success in executing on our value-enhancing strategies. We have continued to see a strong demand environment, and in the first quarter our margins expanded dramatically, bolstered by strong cost control, with adjusted CASM declining 1.8% despite the weaker Canadian dollar, and solid traffic growth particularly on leisure sun routes.”
In the first quarter of 2015, on capacity growth of 9.3%, system passenger revenues of $2.786 billion increased $178 million or 6.9% from the first quarter of 2014. The increase in system passenger revenues was due to traffic growth of 10.9% partly offset by a yield decline of 4.2%.
In the first quarter of 2015, operating expenses of $3.049 billion decreased $78 million or 2% from the first quarter of 2014 on capacity growth of 9.3%. The decline in operating expenses reflected the impact of lower jet fuel prices largely offset by the impact of the weaker Canadian dollar and capacity-related cost increases.
The unfavourable impact of a weaker Canadian dollar on foreign currency denominated operating expenses (mainly U.S. dollars) in the first quarter of 2015, when compared to the first quarter of 2014, increased operating expenses by approximately $135 million.
This currency impact was partly offset by a favourable currency impact of $38 million on passenger revenues and realized currency derivatives gains of $51 million.
