Mr. Eddy Doyle reports

CANADA JETLINES ANNOUNCES Q4 AND FULL YEAR 2023 FINANCIAL RESULTS

Canada Jetlines Operations Ltd. has released its financial results for the fourth quarter and full year ended Dec. 31, 2023. All financial figures are in Canadian dollars and in accordance with IFRS (international financial reporting standards) as presented in the annual consolidated financial statements.

Q4 2023 three-month period financial results:

• Operating revenues of $9.9-million, representing an increase of $6.6-million compared with Q4 2022.
• Operating loss of ($6.1)-million, with an operating margin of (61.4 per cent), a decrease of $1.9-million compared with Q4 2022.
• Adjusted EBITDAR (earnings before interest, taxes, depreciation and amortization, and rent expense) of ($3.7)-million, an increase of $700,000 compared with Q4 2022.
• A net loss of ($7.1)-million, an increase of $2.5-million compared with Q4 2022.
• Net cash flows for 2023 from operating activities of $3.0-million, an increase of $10.1-million compared with the same period of the prior year.

Total operating expenses for Q4 2023 were $15.9-million as compared with $7.4-million in the same period of the prior year, an increase of 116.0 per cent. This increase was primarily due to the increase in operational activity related to an increase in number of aircraft and aircraft utilization as compared with Q4 2022.

The loss and comprehensive loss were higher for the Q4 2023 as a result of higher fixed costs due to growth in the number of aircraft. Going forward, the company expects to see seasonal variation in its revenues, loss and comprehensive loss.

Eddy Doyle, Canada Jetlines' chief executive officer, said: "Canada Jetlines has made significant strides in expanding its operations in 2023, now selling and operating flights from Canada to the USA, Jamaica and Mexico, with ongoing efforts to secure similar approvals in select Caribbean countries. Our goal has always been to provide Canadians with unbeatable vacation options and travel experiences."

Full year 2023 financial results

Total operating revenue for the fiscal year 2023 was $37.2-million compared with $3.3-million in the previous year. The company continues to grow its charter and ACMI operations, generating $26.7-million in revenue in fiscal year 2023 compared with $2.4-million in 2022, representing an increase of 1,012.5 per cent. Such increase is due to increased flying activity with the company's larger aircraft fleet.

Total operating expense of $46.0-million for the 2023 fiscal year increased from $15.9-million in 2022, representing a 189.3-per-cent increase. This increase was primarily driven by significant fixed expenses incurred as part of continued growth of the company and increase in the aircraft fleet.

Total assets increased by 84.0 per cent to $50.2-million at year-end 2023, from $27.3-million as at Dec. 31, 2022. This increase in total assets is primarily attributable to the capitalization of right of use assets associated with the addition of aircraft under lease and increase in property and equipment.

Total liabilities increased by 91.3 per cent to $55.9-million at year-end 2023, from $28.9-million as at Dec. 31, 2022. The increase was made up of the liabilities associated with lease liabilities for the three aircraft, as compared with two aircraft in December, 2022. It is also attributable to increased operational activity and the timing of payments and invoices received at the end of the period.

Management commentary and 2024 update

In July, 2023, the company announced that it has taken delivery of its third Airbus A320 aircraft, which has been provided by a global aviation lessor providing aircraft and capital to the world's airlines. This addition enabled scheduled service expansion to new leisure destinations, fulfilling the company's commitment to customers and agency clients to becoming a premier choice leisure airline.

In November, 2023, the company announced that it will provide Canadians an option to buy all inclusive packages to the Caribbean through its wholly owned subsidiary, Canada Jetlines Vacations Ltd. Jetlines Vacations will not only support the company's airline operations but also build a network of resellers and holiday partnerships to expand its offerings and reach new customers. This strategic move further strengthens the company's position in the leisure travel market and aligns with its commitment to providing Canadians with unparalleled vacation choices.

In January, 2024, Canada Jetlines announced the doubling of its fleet to six aircraft with the leasing of three additional A320-214 aircraft, marking a strategic move to enhance the airline's operational capabilities and meet the growing demand for affordable air travel.

In January, 2024, the company also closed the third and final tranche of its non-brokered private placement, raising a total of $13.5-million. The final tranche, totalling $7,466,688, was raised from a single arm's-length investor, Jetstream Aviation Inc. This successful financing demonstrates strong investor confidence in Canada Jetlines' growth strategy.

In March, 2024, Canada Jetlines announced a strategic wet lease agreement with a prominent European carrier. The operation, set to begin with one aircraft in late April, 2024, for a period of six months, and with a second aircraft in late June for a period of three months, reflects the company's operational ability to maximize fleet utilization by deploying its aircraft and crew to Europe during the summer season.

In March, 2024, Canada Jetlines also announced that it will deploy an additional two aircraft from its fleet in Morocco this summer under an Wetlease/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.

"We are pleased with our strong start to the year as we execute our growth strategy. Looking ahead, Canada Jetlines' sustainable plan includes increasing its fleet to seven aircraft by the end of 2024 and projecting further expansion to 15 aircraft by 2026. This expansion aims to enhance operating economics, customer comfort and overall guest experience, emphasizing a commitment to excellence from booking to in-flight service," said Mr. Doyle.

Liquidity

The company ended the year with $6.7-million in current assets, an increase of $3.8-million compared with year-end 2022. The increase is primarily attributable to increase in cash due to equity financing.

Current liabilities increased from $8.2-million in 2022 to $19.5-million as at Dec. 31, 2023, mainly due to increased operational activity and growth in the aircraft fleet.

Based on the company's working capital position, the company will need to raise additional capital during the next 12 months and beyond to support its business plan. Canada Jetlines is seeking additional capital in the form of debt, convertible debt or equity in order to further invest in the business and facilitate the continued growth of the fleet, including the acquisition of additional leased aircraft, as well as additional working capital.

This news release should be read in conjunction with Canada Jetlines' annual audited financial statements and management's discussion and analysis for the year ended Dec. 31, 2023, available on SEDAR+.

Director appointment

The company also announces that effective today it has appointed Gurinderpal Singh as a director of the company. Mr. Singh is the second nominee of Jetstream Aviation Inc. under the terms of its subscription agreement.

About Canada Jetlines Operations Ltd.

Canada Jetlines Operations, trading as Canada Jetlines, is a Canadian leisure airline committed to providing an exciting travel experience to its passengers. With a growing network of destinations, Canada Jetlines is dedicated to connecting Canadians with some of the world's most captivating and sought-after locations.

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