The airline’s full-year consolidated operating revenue was C$14.7 billion, up 5.8% over C$13.9 billion in 2015; operating expenses totaled C$13.3 billion, up 7.8% from C$12.4 billion in 2015. Operating income for the year totaled C$1.3 billion, down 10.1% from C$1.5 billion in 2015.
Excluding special items, the company’s full-year EBITDAR totaled $2.8 billion, up 8.9% over 2015.
Air Canada’s full-year operating margin was 9.2%, down 1.6 points from 2015, and its full-year ROIC was 14.7%, compared to 18.3% in 2015.
Full-year passenger traffic grew 13.2% to 76.5 billion RPMs as capacity increased 14.7% to 92.7 billion ASMs, producing a full-year passenger load factor of 82.5%, down one point from 2015. The airline opened 28 new routes in 2016 and 18 additional routes are on track to be launched in 2017.
Full-year PRASM was down 7.7% to C13.9¢ and CASM declined 6% to C14.4¢. The airline’s full-year yield decreased 6.6% YOY to C16.8¢, which the company attributed to a 5.1% increase in average stage length combined with an increase in the number of seats in long-haul leisure markets. Lower carrier surcharges, growth in international connecting traffic and competitive pressures in the domestic, European and Pacific markets also contributed to the yield decrease, the company said.
Air Canada’s 2016 fourth-quarter operating revenue increased 2. % year-over-year (YOY) to C$3.4 billion and operating expenses rose 12.7% YOY to C$3.4 billion, producing C$18 million in fourth-quarter operating income, an 88.6% decrease from C$158 million in 4Q2015. The airline reported a 2016 fourth-quarter net loss of C$179 million, deepened from the company’s C$116 million net loss in 4Q 2015. Fourth-quarter yield was down 7.2%, also attributable to the increase in seats, lower fares in long-haul markets, lower carrier surcharges and international traffic growth, the company said.
Air Canada’s combined mainline and Air Canada rouge fleet totaled 213 aircraft as of Dec. 31, 2016. Nine Boeing 787s and two 777s were introduced into the mainline fleet in 2016, and the airline ordered 45 Bombardier CS300s with options for an additional 30 of the model. In 2017, the airline expects to add nine 787-9s and two 737 MAX-8s to its mainline fleet, while also removing six 767-300ERs. Four new 767-300ERs will enter the Air Canada rouge fleet in 2017, bringing the combined fleet to 222 by the end of 2017.
“In 2016 [we] achieved outstanding results, surpassing the previous records for EBITDAR, total revenues and liquidity levels, underscoring the effectiveness of our business strategy and improved competitive position,” Air Canada president and CEO Calin Rovinescu said. “Our share price jumped 34% in 2016—more than that of any of our North American airline peers and nearly double the 17.5% return on the S&P/TSX composite index.”
“Looking at 2017 we see a continued strong demand environment and growth in sixth freedom traffic though our major Canadian hubs. Taking advantage of our broad network and locations as ideal transit points between international and connecting traffic is key to our strategy going forward,” Rovinescu said. “We expect to achieve an EBITDAR margin between 15%-18% even with our current forecast of rising fuel prices and our ROIC is projected to be between 9%-12%.”
(Mark Nensel - ATWOnline News)