Pratt & Whitney, a division of Raytheon Technologies Corp. and Air Canada have announced the selection of Pratt & Whitney GTF™ engines to power 30 firm and 14 purchase right Airbus A321XLR aircraft. Pratt & Whitney will also provide Air Canada with engine maintenance through an EngineWise® Comprehensive service agreement. The first aircraft is expected to be delivered in the first quarter of 2024.

In 2020, Air Canada became the first airline in Canada to operate the Airbus A220 family and the first in North America to operate A220-300 aircraft. The airline currently operates 28 A220-300 aircraft with an additional 17 on order. Pratt & Whitney has a long history with Air Canada, dating back to the airline’s first aircraft, a Lockheed Model 10 Electra with Pratt & Whitney Wasp engines. Prior to the A220, Pratt & Whitney powered Air Canada’s fleet of Boeing 767 aircraft.

The Pratt & Whitney GTF™ engine is the only geared propulsion system delivering industry-leading sustainability benefits, mature dispatch reliability and world-class operating costs. GTF engines for the Airbus A320neo family reduce fuel consumption and carbon emissions by 16 percent, regulated emissions by 50 percent and noise footprint by 75 percent. The engine’s revolutionary geared fan architecture is the foundation for more sustainable aviation technologies in the decades ahead, with advancements like the Pratt & Whitney GTF Advantage™ engine and beyond.

Air Canada aircraft photo gallery (current livery):

• First quarter operating revenues of $2.573 billion, or about three-and-a-half times first quarter 2021 operating revenues
• First quarter 2022 operating loss of $550 million compared to an operating loss of $1.049 billion in the first quarter of 2021
• Advance ticket sales grew about $1.2 billion in the first quarter of 2022 from year end 2021
• Airbus A321XLR order increased by four to 30 aircraft with IAE to supply related PW1100G-JM engines

Air Canada today reported its first quarter 2022 financial results.

“The substantial year-over-year improvement in Air Canada’s first quarter results is clear evidence that a recovery is underway. Our strong improvement is a testament to our employees, and I thank them for their hard work taking care of our customers throughout more than two years of a global pandemic. Now, our employees are demonstrating this same level of determination, commitment and passion in executing on our recovery strategy,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

“The year began with weakness brought on by the Omicron variant and travel restrictions. However, we quickly rebounded in March with passenger volumes exceeding the strong December levels and passenger ticket sales in March 2022 over 90 per cent of March 2019 levels, a leading indicator to much stronger 2022 second and third quarter results. For the quarter, Air Canada had operating revenues of $2.573 billion, more than triple that of the same quarter in the prior year.  This was accompanied by a strict cost discipline that reduced adjusted CASM* by over six per cent from the fourth quarter of 2021. Quarterly EBITDA*, while a negative $143 million, improved $620 million over last year and we ended the quarter with $10.162 billion in unrestricted liquidity, close to 2021 year-end levels.

“In anticipation of our recovery, Air Canada has kept the course with key long-term projects to increase and diversify revenue and lower costs. One such program is the expansion of Air Canada Cargo, with quarterly revenue up 42 per cent to $398 million from the first quarter of 2021, and now further expanded with the addition of two new Boeing 767-300 freighters to be delivered in 2022.  The renegotiation of key engine maintenance contracts completed in the quarter, will also yield savings over the remaining life of the contracts.  Aeroplan air redemption bookings in the quarter exceeded those of the same quarter in 2019 by 19 per cent.  The relaunched program saw the highest new member acquisitions and redemptions in a quarter, and generated third-party gross billings exceeding first quarter 2019 levels by 21 per cent,” said Mr. Rousseau.

“Air Canada is rapidly adapting for the post-pandemic world. We are doing our part by contributing to the travel of Ukrainians to Canada, with a substantial donation of 100 million Aeroplan points.  We have also advanced our ESG goals in the quarter by announcing an order for 26 fuel-efficient Airbus A321XLR aircraft, which we have now increased to 30 aircraft. As well, we have recently entered into a long-term agreement with International Aero Engines, LLC (Pratt & Whitney) for the selection of the PW1100G-JM engines, spare engines and related maintenance services for these new aircraft.  We are responding to the evolving competitive landscape through our Rise Higher strategy to elevate all aspects of our business, particularly as it relates to the customer experience. Given pent-up travel demand, the demonstrated loyalty of our customers, and the expected further removal of travel-related government restrictions, Air Canada anticipates its recovery will gain momentum through the balance of 2022 and beyond,” said Mr. Rousseau.

• In the first quarter of 2022, Air Canada’s operating capacity, measured by Available Seat Miles (ASMs) increased about 3.4 times from the first quarter of 2021. When compared to the first quarter of 2019, ASM capacity represented a decline of 45 per cent, which was generally in line with the capacity expectations projected in Air Canada’s fourth quarter 2021 earnings release dated February 18, 2022.
• First quarter 2022 passenger revenues of $1.917 billion increased nearly five times from the first quarter of 2021.
• First quarter 2022 operating revenues of $2.573 billion increased about three-and-a-half times from the first quarter of 2021.
• First quarter 2022 total operating expenses of $3.123 billion increased $1.345 billion or 76 per cent from the first quarter of 2021.
• First quarter 2022 cost per available seat mile (CASM) of 21.8 cents compared to first quarter 2021 CASM of 42.2 cents.
• First quarter 2022 adjusted cost per available seat mile* (adjusted CASM) of 15.6 cents compared to first quarter 2021 adjusted CASM of 40.4 cents.
• First quarter 2022 EBITDA (excluding special items)* or earnings before interest, taxes, depreciation and amortization of negative $143 million compared to negative EBITDA of $763 million in the first quarter of 2021.
• First quarter 2022 net loss of $974 million or $2.72 per diluted share compared to a net loss of $1.304 billion or $3.90 per diluted share in the first quarter of 2021.
• First quarter 2022 cash from operations was $335 million compared to cash used in operations of $888 million in the first quarter of 2021, an improvement of $1,223 million driven by improved operating results and strong advance ticket sales. Free cash flow of $59 million in the first quarter of 2022 improved by $1,221 million when compared to the same period in 2021.

* EBITDA, EBITDA margin, adjusted CASM and free cash flow (discussed further below) are non-GAAP financial measures or non-GAAP ratios. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. Refer to the “Non-GAAP Financial Measures” section of this news release for descriptions of Air Canada’s non-GAAP financial measures and non-GAAP ratios and for a reconciliation of Air Canada non-GAAP measures to the most comparable GAAP financial measure.

Over the quarter, and until February 28, 2022, all travellers, regardless of vaccination status, were required to provide a negative pre-entry COVID-19 PCR test result taken within 72 hours of departure or a proof of a positive test result received in the previous 11 to 180 days. On February 15, 2022, the Government of Canada announced changes to certain travel restrictions for fully vaccinated travellers.  Refer to section 4 “Overview & First Quarter 2022 Highlights” of Air Canada’s First Quarter 2022 MD&A for additional information on such changes.

On March 17, 2022, the Government of Canada announced additional changes that came into effect on April 1, 2022, allowing for fully vaccinated travellers to no longer be required to provide a pre-entry COVID-19 test result to enter Canada by air, land or water. Foreign nationals who do not meet the requirements to be considered fully vaccinated are not able to enter Canada unless they meet an exemption set out in the Orders made under the Quarantine Act. Unvaccinated or partially vaccinated travellers allowed to enter Canada remain subject to the federal requirement to quarantine and take a COVID-19 PCR test at the time of arrival and on day eight after arrival.

Since the onset of the pandemic, Air Canada has actively managed its ASM capacity based on prevailing market trends and travel demand. In January 2022, in response to the emergence of the Omicron variant and the associated short-term decline in demand, Air Canada suspended flights to certain Caribbean destinations from January 24 to April 30, 2022.

In February 2022, Air Canada made the following announcements (adding to the schedule updates announced in the second half of 2021):

• An expansion of its North American network for Summer 2022 that includes the launch of new service on four transborder and three domestic routes, as well as the restoration of 41 North American routes. Air Canada plans to operate to 51 Canadian and 46 U.S airports this summer and offer customers the largest network and most travel options of any Canadian carrier.
• Expanded Summer 2022 international schedule with 34 routes relaunching across the Atlantic and Pacific.

Further information on the schedule updates announced in 2021 can be found in section 4 “2021 Highlights” of Air Canada’s 2021 MD&A.

For the second quarter of 2022, Air Canada plans to increase its ASM capacity by approximately 414 per cent from the same quarter in 2021 (or about 73 per cent of second quarter 2019 ASM capacity).

Air Canada is reiterating the following guidance for the full year 2022 provided in its news release dated March 30, 2022:

• Air Canada plans to increase its full year 2022 ASM capacity by about 150 per cent from 2021 ASM levels (or about 75 per cent of 2019 ASM levels). Air Canadawill continue to adjust capacity and take other measures as required, including to account for passenger demand, public health guidelines, and travel restrictions globally, as well as other factors, such as inflation and other cost pressures.
• For 2022, Air Canada expects adjusted cost per available seat mile (CASM)* to remain about 13 to 15 per cent above 2019 levels.
• For 2022, Air Canada expects an annual EBITDA margin* of about 8 to 11 per cent.

Assumptions were made by Air Canada in preparing and making forward-looking statements. Among these, Air Canada assumes moderate Canadian GDP growth for 2022. Air Canada also expects that the Canadian dollar will trade, on average, at C$1.26 per U.S. dollar for the full year 2022 and that the price of jet fuel will average $1.24 per litre for the full year 2022.

Below is a description of certain non-GAAP financial measures used by Air Canada to provide readers with additional information on its financial and operating performance. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for, or superior to, GAAP results. Refer to the discussion below for descriptions of non-GAAP financial measures and to the tables accompanying this news release for reconciliations of the non-GAAP financial measures, used in this news release to the most comparable GAAP financial measures.

EBITDA (earnings before interest, taxes, depreciation and amortization) is commonly used in the airline industry and is used by Air Canada as a means to view operating results before interest, taxes, depreciation and amortization as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. Air Canadaexcludes special items from EBITDA as these items may distort the analysis of certain business trends and render comparative analysis across periods or to other airlines less meaningful.

EBITDA margin (EBITDA as a percentage of operating revenue) is commonly used in the airline industry and is used by Air Canada as a means to measure the operating margin before interest, taxes, depreciation and amortization as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets.

Air Canada today said it is donating 100 million Aeroplan points to support the Canadian government’s initiative to bring Ukrainians to Canada. The points will contribute towards facilitating transportation and can be used on flights operated by Air Canada and its Star Alliance partners including Lufthansa, LOT Polish Airlines, SWISS, United Airlines and other carriers.  The Shapiro Foundation is also contributing to this effort and Miles4Migrants, a non-profit charity will manage and facilitate the flight bookings.

“Together with our employees, we are ready and prepared to assist and support the Canadian Government’s plans to bring Ukrainian people to Canada. With our 100 million Aeroplan points donation, we offer our global network and the strength of our Star Alliance partnerships, in facilitating travel to Canada. We are proud to work with other organizations and international programs to contribute towards a goal to enable up to 10,000 people to travel to Canada as quickly as possible,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

“Our vision at Miles4Migrants is a world where displaced persons of all backgrounds can find safety and community in new homes. As we have been seeing Ukrainians become displaced, our community of donors has once again responded, donating to support flights for Ukrainian families to reach safety over the past weeks,” said Diane Padilla, Executive Director of Miles4Migrants.

“We are honoured and ready to join the Government of Canada, The Shapiro Foundation, and Air Canada to expand our impact and help fly thousands of Ukrainians to their new homes. We are confident that the Canadian public and private sector will join us in our effort to fund their flights.”

“We are humbled to be able to play a part in assisting Ukrainian families who are being so warmly welcomed by Canadians. We know that access to flights is a critical need and we are proud to partner with Air Canada. We will double Aeroplan member donations towards Ukrainian travel, and donate the equivalent of up to 50 million Aeroplan points to help more people travel to Canada,” said Ed Shapiro, trustee for The Shapiro Foundation.

Aeroplan members may elect to contribute towards this initiative facilitating Ukrainians travelling to Canada by donating Aeroplan points at Ukrainian Relief Fund.  From April 20 2022 until July 2022, members who donate Aeroplan Points to the Ukrainian Relief Fund or to Miles4Migrants will double the impact of their contribution as the value of the points donated will be matched, by a donation equal to up to 50,000,000 points, by the Shapiro Foundation.

Air Canada’s support for Ukrainian relief aid to date includes:

• An Air Canada donation of $10 per booking made on its website starting March 22 for a total donation of $250,000 to Ukraine relief aid;
• Air Canada employees and the Air Canada Foundation donated $170,000 to support Ukraine relief;
• On March 9 Air Canada operated a humanitarian special cargo flight on behalf of Airlink and other aid partners transport hospital beds, humanitarian and medical supplies to Warsaw, Poland and medicines destined for Lviv, Ukraine;
• Ongoing transportation of medical supplies to Europe with a final destination in the Ukraine;
• Transportation of rapid response teams to scale up operations in Europe to help arriving Ukrainian families.