In fiscal 2022, the Company continued to carefully manage spending while collaborating with customers and stakeholders to support the increase in air traffic.
For the fiscal year ended August 31, 2022, the Company reported total revenue of $1,507 million, compared to $870 million in the previous year.
The pandemic and the resulting economic contraction continues to have a negative impact on global air traffic and on the aviation industry. The pandemic began impacting air traffic levels in mid-fiscal 2020 and since then, air traffic levels, as measured in weighted charging units (WCUs) — a measure of the number of billable flights, aircraft size and distance flown in Canadian airspace, which serves as the basis for movement-based service charges — have continued to trend below levels seen in the fiscal year ending August 31, 2019 (fiscal 2019).
While WCUs are not yet back to pre-pandemic levels in fiscal 2019, they are showing positive signs of recovery. Air traffic levels in fiscal 2022 increased in comparison to fiscal 2021 by 76.8% but remained 21.5% lower than in fiscal 2019.
As compared to fiscal 2019, customer service charges revenue was 5.0% higher. This reflects the increase in customer service charges of 29.5% as of September 1, 2020, which was largely offset by lower air traffic levels.
As a result of the growth in revenue from customer service charges, the rate stabilization account decreased from a debit balance (due from customers) of $656 million at the end of fiscal 2021 to a debit balance of $574 million at the end of fiscal 2022.
The Company had positive free cash flow of $175 million in fiscal 2022 as compared to negative free cash flow of $509 million in fiscal 2021. The positive free cash flow in fiscal 2022 is largely attributable to higher-than-expected receipts from customer service charges and proceeds from strategic divestments during the year.
Operating expenses for fiscal 2022 were $1,416 million as compared to $1,278 million in fiscal 2021. The increase is largely due to the Canada Emergency Wage Subsidy program ending in fiscal 2022, as well as an increase in overtime costs as air traffic levels recover.
Net other income and expenses for fiscal 2022 were a net expense of $183 million as compared to a net expense of $176 million in fiscal 2021. During fiscal 2022, the Company recorded an $82 million (U.S. $63 million) non-cash reduction to the fair value of its investment in preferred interests of Aireon LLC as compared to a non-cash reduction of $24 million (U.S. $21 million) recorded in fiscal 2021. Foreign exchange gains in fiscal 2022, as compared to foreign exchange losses in fiscal 2021, primarily related to the Company’s investment in Aireon LLC, along with lower interest costs related to employee benefits and long-term debt partially offset the negative change in fair value.
The Company had a net loss (before net movement in regulatory deferral accounts including rate stabilization) of $79 million in fiscal 2022 as compared to a net loss of $577 million in fiscal 2021.