Air Canada (ACDVF) Q3 2024 Earnings Call Highlights: Strong Cargo Growth and New Share Buyback ...

GuruFocus News
4 min read

In This Article:

  • Operating Revenue: $6.1 billion for Q3 2024.

  • Adjusted EBITDA: $1.5 billion with a margin of 24.9%.

  • Adjusted EPS: $2.57 per diluted share.

  • Net Income: $2 billion, including a $1.2 billion tax recovery.

  • Passenger Revenue: $5.6 billion, a 4% decline from Q3 2023.

  • Cargo Revenue: $253 million, an 18% increase year over year.

  • Premium Cabin Revenue: 28% of total revenues, up 1 percentage point from Q3 2023.

  • Operating Income: $1 billion for the quarter.

  • Operating Expenses: Increased by 3% year over year.

  • Fuel Expense: Increased by 1% compared to Q3 2023.

  • Labor Expense: Increased by 3% year over year.

  • Maintenance Expense: Decreased by 4% from Q3 2023.

  • Adjusted CASM: Decreased by 0.4% year over year.

  • Cash Flow: Generated $282 million in Q3 2024.

  • Free Cash Flow: Nearly $1.8 billion year-to-date.

  • CapEx: Expected to be close to $2.5 billion for the full year 2024.

  • Full Year Capacity Growth: Expected to increase by around 5% from 2023.

  • Share Buyback Program: Approved to purchase up to 10% of the public float.

Release Date: November 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Air Canada (ACDVF) reported solid third-quarter results with operating revenues of $6.1 billion and an adjusted EBITDA of $1.5 billion, surpassing market expectations.

  • The company successfully reached a new four-year collective agreement with its pilot group, avoiding significant disruptions and maintaining revenue impact.

  • Air Canada's cargo segment showed strong performance with an 18% year-over-year revenue growth, driven by higher yields and volumes in the Pacific market.

  • The company announced a new share buyback program, aiming to reverse some of the dilution from measures taken during the COVID-19 pandemic.

  • Air Canada (ACDVF) continues to see healthy demand across its markets, with stable load factors and encouraging signals for yield improvement in upcoming quarters.

Negative Points

  • Passenger revenues declined by 4% from the same quarter last year, with decreases in yield and system load factor leading to a 7% decline in PRASM.

  • The pilot contract negotiations led to softer booking volumes, impacting revenues particularly in September and continuing into October.

  • Air Canada (ACDVF) faces ongoing supply chain pressures, aircraft availability issues, and geopolitical conditions affecting capacity growth.

  • The company anticipates more intense unit cost pressure in 2025 due to regulatory changes, higher airport infrastructure fees, and maintenance cost inflation.

  • A one-time pension past service cost charge of about $500 million is expected in the fourth quarter, impacting financials despite being funded from the planned surplus.

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