News

In the third quarter of fiscal 2024, the Company saw air traffic levels, as measured in weighted charging units⁽¹⁾, increase by 5.6% on a year over year basis. The Company’s revenue for the third quarter of fiscal 2024 was $433 million, compared to $436 million over the same period in fiscal 2023.

The Company had positive free cash flow⁽²⁾ of $17 million in the third quarter of fiscal 2024 as compared to positive free cash flow of $32 million in the same period in fiscal 2023. The decrease in free cash flow is driven by higher capital expenditures, partially offset by higher operating cash inflows as compared to the third quarter of fiscal 2023. The Company ended the quarter with a cash balance of $571 million.

“Partnering for success is a foundational concept to how NAV CANADA will achieve its long-term goals, and this concept featured strongly in the third quarter,” said Raymond G. Bohn, President and CEO, NAV CANADA. “Our partnership with CAE brings two leading Canadian companies together to augment our training capacity, contributing to the future sustainability of operations and bringing more Canadians into our highly skilled workforce sooner.  We celebrated the ground-breaking of our first LEED certified Control Tower with the Victoria Airport Authority and, more recently, have announced our technology partner that will support our Digital Aerodrome Air Traffic Services program. Our partners, customers and our people are at the heart of how we are building a resilient, innovative, and progressive organization which is ready to tackle future challenges.”

Operating expenses for the third quarter of fiscal 2024 were $418 million as compared to $386 million over the same period in fiscal 2023, primarily due to higher compensation costs driven by an increase in both wage and staffing levels.

Net other income and expenses for the third quarter of fiscal 2024 were a net expense of $19 million as compared to $24 million over the same period in fiscal 2023, as a result of lower net interest expense.

The Company had a net loss (before net movement in regulatory deferral accounts including rate stabilization) of $5 million in the third quarter of fiscal 2024 as compared to net income of $26 million for the third quarter of fiscal 2023.

The Company is subject to legislation that regulates its approach to setting charges. The timing of the recovery of certain revenue and expenses through customer service charges is managed through movements in regulatory deferral accounts. The net movement in regulatory deferral accounts for the third quarter of fiscal 2024 was an expense of $27 million as compared to an expense of $39 million over the same period in fiscal 2023. This change in regulatory deferrals is primarily due to a decrease in favourable rate stabilization adjustments of $9 million and a $3 million net increase in adjustments required to align the accounting recognition of certain transactions to the periods in which they will be considered for rate setting. As at May 31, 2024, the rate stabilization account had a balance of $220 million to be recovered from customers through future customer service charges.

1. Weighted charging units represent a traffic measure that reflects the number of billable flights, aircraft size and distance flown in Canadian airspace and is the basis for movement-based service charges, which comprise the vast majority of the Company’s revenue.
2. Free cash flow is a non-GAAP financial measure used by the Company to enhance the overall understanding of its financial and operating performance. Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines free cash flow as cash generated from operations, less capital expenditures (net of government grants received), investments in regulatory assets, investments in Aireon LLC and equity related investments and principal payment of lease liabilities. Management places importance on this indicator as it assists in measuring the impact of its investment program on the Company’s financial resources and provides users with a more stable indication of the Company’s ability to meet its debt obligations and continue to invest in the air navigation system.

This press release contains certain forward-looking statements that are subject to important risks and uncertainties. Actual results may differ materially from the results indicated in these statements for a number of reasons. NAV CANADA disclaims any intention to update any forward-looking statements.