At its 2024 Investor Day presentation this morning, Air Canada will reaffirm its 2024 full year guidance and announce its 2025 full-year guidance, 2028 key financial targets and 2030 aspirations.
The ambitions are bold, including 2028 targets of $30 billion operating revenues, at least 17% adjusted EBITDA margin and approximately 5% free cash flow margin by 2028.
"We are proud and excited to share Air Canada's ambitions. We are announcing a long-term plan grounded on a proven commercial strategy,” said Michael Rousseau, President and CEO.
“The story of Air Canada's performance is one of demonstrated ability to execute and deliver on commitments. Our strategy, which builds on and leverages the unique strengths developed over the last decade, is to rise even higher with consistent margin expansion and structural cash generation while maintaining a strong balance sheet and a responsible risk profile.”
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Air Canada president and CEO Michael Rousseau (Photo Credit: Air Canada Media License)
Rousseau added that the plan includes expanding AC’s network, improving the customer experience, taking care of employees, enhancing financial performance and continuously investing in the business to generate long-term value for investors.
“We believe we are very well positioned to execute our long-term plans," the CEO stated in a press release.
Here are more details:
Air Canada is reiterating the full year 2024 guidance provided on November 1, 2024, and is providing guidance for the full year 2025.
Metric
(Dollar amounts are in Canadian dollars) | 2023
Results | 2024
Guidance | 2025
Guidance |
| ASM capacity | 99.012 billion | Approximately 5%
increase versus
2023 | Between 3% and
5% increase versus
2024 |
| Adjusted CASM* | 13.49 ¢ | Approximately 2%
increase versus
2023 | Between 14.25 ¢
and 14.50 ¢ |
| Operating expenses | $19.554 billion | Not guided | Not guided |
| Adjusted EBITDA* | $3.982 billion | Approximately $3.5
billion | Between $3.4 and
$3.8 billion |
| Operating income | $2.279 billion | Not guided | Not guided |
| Free cash flow* | $2.756 billion | Not guided | Breakeven +/- $200
million |
Net cash flows from
operating activities | $4.320 billion | Not guided | Not guided |
In addition, Air Canada’s Investor Day presentation will share its expectations for certain financial measures for the full year 2024, its long-term 2028 financial targets and 2030 aspirations, as described below.
| Metric | 2023
Results1 | 2024
Expectations | 2028
Targets | 2030
Aspirations |
| Operating revenues | $21.833 billion | Approximately
$22 billion | Approximately
$30 billion | Exceed $30
billion |
Adjusted EBITDA
margin* | 18 % | Approximately
16% | Greater than or
equal to 17% | Between 18%
and 20% |
| Operating margin | 10 % | Not provided | Not provided | Not provided |
Net cash flows from
operating activities as
a percentage of
adjusted EBITDA* | 108 % | Greater than
90% | Approximately
90% | Approximately
90% |
Additions to property,
equipment and
intangible assets as a
percentage of
operating revenues* | 7 % | Approximately
12% | Lower than or
equal to 12% | Lower than
12% |
| Free cash flow margin* | 13 % | Between 4%
and 5% | Approximately
5% | Approximately
5% |
Return on invested
capital* | 18 % | Not provided | Not provided | Greater than or
equal to 12% |
Fully diluted share
count | Approximately
376 million
shares | Not provided | Lower than 300
million shares | Lower than 300
million shares |
Air Canada says its 2028 long-term targets and 2030 aspirations do not constitute guidance or outlook, but are provided to assist observers in measuring progress toward its objectives. The airline says it may review and revise these targets and aspirations including as economic, geopolitical, market and regulatory environments change.
The event will be webcast live, and a replay of the investor day along with the presentation materials will be available shortly after the event by clicking here.
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