Air Canada reports second-quarter net loss of CA$1.165 billion

Air Canada has released its operational results for the second quarter of 2021. The carrier recorded a net loss of CA$1.165 billion in the second quarter of 2021 compared to a net loss of CA$1.752 billion for the same quarter in 2020. In the second quarter of 2021, on a year-over-year capacity increase of 78%, operating expenses of CA$1.970 billion decreased CA$112 million or five% compared to the same quarter in 2020. Net cash flows for operating activities of CA$1.377 billion deteriorated by CA$126 million from the same quarter in 2020 resulting from a decrease in cash from working capital, mainly attributable to ticket refunds of CA$997 million, which was partially offset by an improvement in advance ticket sales.

Net cash burn of CA$745 million, or approximately CA$8 million per day was an improvement on management’s expectation of CA$13-CA$15 million per day. EBITDA in the second quarter was better than expected as a result of continued very strong cost control and rapid adjustments of capacity to market demand. The EBITDA variance accounted for CA$2 million per day of the favorable variance in net cash burn.  Working capital contributed CA$2 million daily to the favorable variance and resulted predominantly from stronger advance ticket sales than forecast and to the ongoing strong management of trade receivables and other working capital items. Capital expenditures were also lower than forecast in the quarter, partly due to the strengthening Canadian dollar.

“The COVID-19 pandemic continued to weigh on Air Canada and the Canadian airline industry in the second quarter, with its impact on travel reflected in our results,” stated Michael Rousseau, President and Chief Executive Officer of Air Canada, adding that “Our cash burn in the second quarter of about CA$8 million on average per day was better than earlier projections of CA$13-CA$15 million. We attribute this to increased bookings and our continuing effective cost controls.”