Canada Jetlines Operations Ltd. (CJET), a leading Canadian leisure airline, recently announced its financial results for the fourth quarter and full year ended December 31, 2023. Here’s a breakdown of the key takeaways:
Canada Jetlines: Q4 2023 Highlights
Revenue Growth
Positive news for Canada Jetlines, with operating revenues reaching $9.9 million, a significant increase of 205.1% compared to $3.2 million in Q4 2022.
This growth is attributed to increased flight revenue, along with additional income from sub-service ACMI (Aircraft, Crew, Maintenance, and Insurance) and charter operations.
Operating Loss
Despite the revenue increase, Canada Jetlines did experience an operating loss of $6.1 million in Q4 2023. This represents a decrease in operating margin compared to Q4 2022.
Adjusted EBITDAR
While the company incurred an operating loss, the Adjusted EBITDAR (a non-GAAP financial measure) showed some improvement.
Adjusted EBITDAR came in at -$3.7 million, reflecting a slight increase compared to Q4 2022.
Increased Expenses
The operating loss can be attributed to a rise in expenses (116.0%) compared to Q4 2022. This increase is primarily due to the expansion of the company’s operations, including a larger fleet size and increased aircraft utilization.
Full Year 2023 in Review
Canada Jetlines’ financial performance in 2023 reflects a company in its growth phase. Total operating revenue surged to $37.2 million, a massive jump of 1,036.4% compared to $3.3 million in 2022.
This significant increase is primarily driven by the expansion of the company’s charter and ACMI operations. However, the company also experienced a substantial increase in operating expenses for 2023, reaching $46.0 million compared to $15.9 million in 2022.
This rise reflects the fixed costs associated with the company’s growth and fleet expansion.
The company’s balance sheet also saw significant changes in 2023. Total assets grew by 84.0% to reach $50.2 million at the end of the year, compared to $27.3 million at the end of 2022.
This is primarily due to the addition of leased aircraft and investments in property and equipment. Total liabilities also rose by 91.3% to $55.9 million at year-end 2023, compared to $28.9 million in 2022.
This increase is attributed to lease liabilities for the additional aircraft and the timing of payments and invoices.
2024: Looking Ahead
Despite the operating losses, Canada Jetlines remains optimistic about the future. CEO Eddy Doyle expressed confidence in the company’s growth strategy, which includes expanding the fleet to seven aircraft by the end of 2024 and further to 15 aircraft by 2026.
This expansion aims to improve operating efficiency, enhance customer comfort, and provide an overall exceptional guest experience.
Targeting Leisure Travel Market
In January 2024, Canada Jetlines announced the doubling of its fleet to six aircraft with the leasing of three additional A320-214 aircraft. This marked a strategic move to enhance the airline’s operational capabilities.
Canada Jetlines is primarily focused on establishing itself as a leader in leisure travel, targeting sun destinations in the Caribbean and Mexico while offering competitive prices for Canadians seeking a relaxing getaway.
Wet Leasing Strategy
Diversification into wet leasing arrangements was a key highlight of strategy for the airline. In March the carrier announced a strategic wet lease agreement with a prominent European airline.
The operation is set to begin with one aircraft in late April 2024 for a period of six months. A second aircraft will follow in late June for a period of three months.
The airline will deploy an additional two aircraft from its fleet in Morocco this summer under a wet lease/ACMI lease agreement with Air Arabia Maroc.
Under the terms of the agreement, two of Canada Jetlines’ A320 aircraft will operate flights between Western European destinations and Morocco. The lease duration spans three months, commencing mid-June through to mid-September 2024.
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