Air Canada (AC) triples operating revenues in Q4. A cheap stock to buy?

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Air Canada (AC) triples operating revenues in Q4. A cheap stock to buy?

Air Canada (AC) triples operating revenues in Q4. A cheap stock to buy?
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Highlights

  • Air Canada (TSX: AC) stocks have been trending on the stock markets after the airline reported its fourth-quarter and full-year results for 2021 on Friday, February 18.
  • The top Canadian flier said that its operating revenue jumped by about 30 per cent year-over-year (YoY) to C$ 2.73 billion in the latest quarter.
  • For the full year of 2021, it noted an operating revenue of C$ 6.4 billion.

Air Canada (TSX: AC) stocks have been trending on the stock markets after the airline reported its fourth-quarter and full-year results for 2021 on Friday, February 18.

The top Canadian flier said that its operating revenue jumped by about 30 per cent year-over-year (YoY) to C$ 2.73 billion in the latest quarter. For the full year of 2021, it noted an operating revenue of C$ 6.4 billion.

Let’s explore Air Canada’s latest financials further. 

Air Canada (TSX: AC) financial performance in Q4 & FY2021

The airline noted an increase of 134 per cent YoY in its operating capacity, measured in terms of available seat miles (ASM), in the fourth quarter of 2021.

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The C$ 8-billion market cap airline firm shrank its operating loss to C$ 503 million in the latest quarter, while on an annual basis, it was down to C$ 3.04 billion.

The air transportation company also noted EBITDA (excluding special items) of C$ 22 million in Q4 FY2021, as against a negative EBITDA balance of C$ 728 million a year ago.

While Air Canada incurred a net loss of C$ 493 million in the fourth quarter of fiscal 2021, it was comparatively lower than that of C$ 1.16 billion in the same period of 2020. In FY2021, its net loss was down to C$ 3.6 billion from that of C$ 4.64 billion in FY2020.

Air Canada (TSX:AC) Q4FY2021 results

Air Canada’s stock performance

Stocks of Air Canada closed at C$ 24.63 apiece on Thursday, February 17, with 2.6 million shares exchanging hands. It was roughly 28 per cent up from its 52-week low of C$ 19.31 (December 20, 2021).

Air Canada scrips have surged by roughly 17 per cent in 2022 and gained by over seven per cent in one month.

Bottomline

Air Canada President and CEO Michael Rousseau said that COVID-19 continued to be a “major challenge” for Air Canada and the international airline industry in 2021. However, the company’s underlying recovery stays “intact” as suggested by improvements in the company’s Q4 results, he added.

For Q1 FY2020, the airline plans on increasing its ASM capacity by 243 per cent YoY.

The company also said that it will continue to adjust its operating capacity and undertake appropriate measures to suit the market environment, considering COVID rules and economic factors like inflation.

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Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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