#Canada #Montreal #Investor Day #Air Canada #2028 targets

Air Canada's Strategic Vision for 2028

Air Canada, Canada's largest airline, outlined its ambitious long-term growth strategy during its 2024 Investor Day, held on December 17, 2024. The plan sets an impressive target of achieving $30 billion in operating revenues by 2028, with aims of a minimum 17% adjusted EBITDA margin and about 5% in free cash flow margin.

A Foundation of Growth

The strategy is built on the strong foundation that Air Canada has developed over the past decade. Michael Rousseau, President and CEO of Air Canada, emphasized the airline's commitment to consistent margin expansion and structural cash generation. He stated, "We are proud and excited to share Air Canada's ambitions, focusing on creating long-term value for our shareholders while also enhancing the customer experience and rewarding our employees."

Key Financial Objectives

During the Investor Day, Air Canada shared not only its 2024 guidance but also expectations for 2025 and its financial targets for 2028. The airline projects a 5% increase in ASM capacity compared to 2023 and expects an adjusted EBITDA margin of at least 16% for the full year 2024. The growth trajectory anticipates operating revenues around $21.833 billion for 2023, with an increase to approximately $22 billion for 2024, and rising to about $30 billion by 2028.

Summary of Financial Metrics

The focus is on ensuring controlled growth with key financial metrics indicating a robust performance trajectory:

• - Operating Revenues: From $21.833 billion in 2023 to approximately $30 billion in 2028
• - Adjusted EBITDA Margin: Expected to be greater than or equal to 17% by 2028
• - Free Cash Flow Margin: Targeting around 5% by 2028

Strategic Priorities and Action Plan

Air Canada's plan places a strong emphasis on margin enhancement and cash generation to allow for ongoing reinvestment in the business. The airline intends to:

• - Expand its network and fleet
• - Enhance customer service through improved experiences
• - Maintain a responsible risk profile with disciplined capital allocation

These initiatives are central to the airline's commitment to not only meeting but exceeding stakeholder expectations, by providing a seamless and satisfactory travel experience.

Challenges and Opportunities

While there are certain economic and external risks that could impact these goals, Air Canada remains optimistic. The company has factored in moderate Canadian GDP growth and an average exchange rate for the Canadian dollar in its forward projections. Strategic expansion into new markets and advancing the customer experience are seen as pivotal in navigating challenges such as geopolitical instability and fluctuating fuel prices.

Air Canada’s aspirations also extend towards its environmental goals, aiming for net-zero greenhouse gas emissions by 2050. This long-term ambition reflects a broader commitment to sustainability within the aviation industry.

Looking Ahead

With this strategic roadmap, Air Canada seeks to build upon its existing strengths while remaining agile in an ever-evolving market. The announcement at the Investor Day marks an important step towards realizing these ambitious goals, setting the stage for sustained growth and profitability in the coming years. For stakeholders, including investors and customers, this vision highlights the company’s commitment to redefining its operational excellence in the aviation sector.

As Air Canada embarks on this journey towards its 2028 targets, all eyes will be on its execution of these plans, and its ability to adapt to the changing dynamics of the airline industry.