Air Canada today reported record third quarter 2017 EBITDAR(1) (earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent) of $1.388 billion compared to the previous record third quarter 2016 EBITDAR of $1.248 billion, an increase of $140 million. The airline recorded a record third quarter EBITDAR margin of 28.4 per cent. On a GAAP basis, Air Canada reported record third quarter operating income of $1.004 billion compared to the previous record third quarter 2016 operating income of $896 million.
Air Canada reported record adjusted net income(1) of $950 million or $3.43 per diluted share in the third quarter of 2017 compared to adjusted net income of $821 million or $2.93 per diluted share in the third quarter of 2016. The airline reported record third quarter net income of $1.786 billion or $6.44 per diluted share compared to net income of $768 million or $2.74 per diluted share in the previous year"™s quarter. In the third quarter of 2017, Air Canada recorded a net income tax recovery of $793 million on its consolidated statement of operations. This amount is excluded from Air Canada"™s reported adjusted net income.
"I am pleased to report that Air Canada delivered its best ever third quarter financial performance," said Calin Rovinescu, President and Chief Executive Officer. "These record results underscore the success of the multi-year transformation of our business model. This follows our September 19th Investor Day when we outlined in further detail our accomplishments and the opportunities that lie ahead which, together with more ambitious financial targets for the next three years, have been well received by the investor community.
"In the quarter, Air Canada"™s financial performance was strong in all key financial measures, including margins and free cash flow, and we continued to reduce our financial leverage, further lowering the airline"™s risk profile.
"Reflecting Air Canada"™s on-going growth, in the quarter we increased passenger revenue by 9.1 per cent to a record $4.478 billion, including strong gains in the business cabin. Traffic increased 8.8 per cent while yield improved 0.4 per cent. This yield growth was achieved despite an increase in average stage length of 3.9 per cent versus last year"™s quarter, driven by a robust revenue environment and effective revenue management. On a stage length adjusted basis, yield improved 2.6 per cent year-over-year. We also achieved a solid cost performance in the quarter with an adjusted CASM decrease of 2.1 per cent from the previous year"™s quarter.
