Air Canada has reported record third quarter adjusted net income of $734 million or $2.50 per diluted share compared to adjusted net income of $457 million or $1.55 per diluted share in the third quarter of 2014, an improvement of $277 million or approximately 61 per cent. EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) amounted to $1,076 million compared to EBITDAR of $749 million in the same quarter in 2014, an increase of $327 million or approximately 44 per cent year-over-year. On a GAAP basis, Air Canada reported record third quarter operating income of $815 million compared to operating income of $526 million, an improvement of $289 million or approximately 55 per cent from the third quarter of 2014. An operating margin of 20.3 per cent in the third quarter of 2015 reflected an improvement of 6.5 percentage points from the same quarter in 2014.
"I am very pleased with the financial results we realized in the third quarter, reflecting both the continued, successful execution of the strategic plan that we have developed over the last several years as well as the efforts of all of our employees," said Calin Rovinescu, President and Chief Executive Officer of Air Canada. "Our EBITDAR margin improved 700 basis points versus last year as passenger revenue increased 6.9 per cent and adjusted CASM declined 0.5 per cent.
"We will continue to direct the majority of our operating cash flow to finance the renewal of our fleet with more fuel efficient aircraft and to reduce net debt levels, two drivers which we firmly believe will continue to increase long-term shareholder value.
"The transformative changes we have made in recent years provide us with the cost structure, fleet and flexibility to respond not only to competitive market conditions, but also to fluctuations in the Canadian dollar and economic downturns. Moreover, our plan is not based on fuel prices staying at the current levels. Our capacity additions for the year, largely in international markets, remain consistent with our plan that had been established in a higher fuel price environment and continue to be important contributors to our increased profits.
In the third quarter of 2015, on capacity growth of 10.5 per cent, system passenger revenues of $3.7 billion increased $240 million or 6.9 per cent from the third quarter of 2014. Passenger revenue per available seat mile (PRASM) decreased 4.0 per cent from the third quarter of 2014 mainly on a lower yield. In the third quarter of 2015, operating expenses of $3.2 billion decreased $64 million or 2.0 per cent from the third quarter of 2014. Air Canada's cost per available seat mile (CASM) decreased 11.3 per cent from the third quarter of 2014.