Air Canada has released its third quarter 2023 financial results. The carrier posted operating revenues of CA$6.344 billion an increase over CA$1 billion from the third quarter of 2022 driven by higher passenger revenues. Operated capacity increased 10% from the third quarter of 2022, about one percentage point below the projection provided in Air Canada's August 11, 2023, news release.
Operating expenses of CA$4.929 billion increased CA$251 million or five per cent from the third quarter of 2022. The increase was due primarily to increases in nearly all line items reflecting higher traffic and capacity year over year and general inflationary pressures. Lower aircraft fuel expense resulting from 23% lower jet fuel prices year over year partially offset the increase.
Operating income of CA$1.415 billion, with an operating margin of 22.3%, improved CA$771 million from the third quarter of 2022. Adjusted EBITDA of CA$1.830 billion, with an adjusted EBITDA margin of 28.8%, increased CA$773 million from the third quarter of 2022.
Net income of CA$1.250 billion increased CA$1.758 billion from the third quarter of 2022. Diluted earnings per share of CA$3.08 compared to a diluted loss per share of CA$1.42 in the third quarter of 2022. Adjusted net income of CA$1.281 billion improved CA$850 million from the third quarter of 2022. Adjusted earnings per diluted share of CA$3.41 compared to CA$1.07 in the third quarter of 2022.
Adjusted CASM of 12.20 cents increased 5.6 per cent from the third quarter of 2022. The unit cost was impacted by a 17% increase in salaries, wages and benefits expenses — on higher staffing levels — and by higher passenger service costs due to higher traffic and higher selling costs — which are correlated to revenues — and by inflationary pressures on various line items. Third-quarter 2023 CASM of 17.57 cents decreased 4.0 per cent from the third quarter of 2022, driven by lower fuel prices and higher capacity year over year, and was partially offset by higher salaries, wages and benefits, higher passenger service costs and inflationary pressures.
Net cash flows from operating activities of CA$408 million increased CA$118 million from the third quarter of 2022. Free cash flow of CA$135 million increased CA$178 million from the third quarter of 2022. (£1.00 = CA$1.68 at time of publication).
