Air Canada takes employee benefits hit

Air Canada takes employee benefits hit | Insurance Business Canada

Life & Health

Air Canada takes employee benefits hit

Operating expenses up in Q4 and full year

Life & Health

By
Terry Gangcuangco

Air Canada has reported higher operating expenses both in the fourth quarter and full-year 2023 due to line items including employee benefits.

Referring to the quarterly results, Air Canada said in a release: “Operating expenses of $5.096 billion increased $388 million or 8%. The increase was due to higher costs in nearly all line items reflecting higher operated capacity and traffic year over year, including higher wages, salaries, and benefits. The increase was partially offset by lower aircraft fuel expense on a jet fuel price decline.”

For the full year, Air Canada’s operating expenses rose by 17% to $19.554 billion.

The airline noted: “The increase was primarily due to increases in all line items reflecting higher operated capacity and traffic year over year, including higher salaries, wages, and benefits. It also reflects the impact of a favourable maintenance cost adjustment of $159 million that was recorded in the first quarter of 2022.”

In terms of net income, Air Canada posted growth in both periods. Net income in the fourth quarter of 2023 was $184 million (up from $168 million); in the full year, $2.276 billion (a turnaround from 2022’s net loss of $1.7 billion).

Meanwhile the company also reported its adjusted net income (loss). In Q4, the adjusted net loss stood at $44 million; in the full year, adjusted net income was $1.7 billion.

The airline said: “Air Canada uses adjusted net income (loss) and adjusted earnings (loss) per share – diluted as a means to assess the overall financial performance of its business without the after-tax effects of impairment of assets, foreign exchange gains or losses, net financing expense relating to employee benefits, gains or losses on financial instruments recorded at fair value, gains or losses on sale and leaseback of assets, gains or losses on debt settlements and modifications, gains or losses on disposal of assets as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.”

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