Air Canada announces long-term plan at its 2024 Investor Day, setting 2028 targets of $30 billion operating revenues, at least 17% adjusted EBITDA margin and approximately 5% free cash flow margin by 2028
Air Canada unveiled its long-term strategic plan at its 2024 Investor Day, setting ambitious 2028 targets including $30 billion in operating revenues and a minimum 17% adjusted EBITDA margin. The company reaffirmed its 2024 guidance and presented 2025 projections, including ASM capacity growth of 3-5% and adjusted EBITDA between $3.4-3.8 billion.
The airline's strategy focuses on network expansion, customer experience enhancement, and consistent margin expansion while maintaining strong balance sheet management. Key 2030 aspirations include exceeding $30 billion in operating revenues, achieving 18-20% adjusted EBITDA margin, and reducing fully diluted share count to below 300 million shares.
Air Canada ha presentato il suo piano strategico a lungo termine in occasione del Investor Day 2024, stabilendo obiettivi ambiziosi per il 2028, tra cui 30 miliardi di dollari di ricavi operativi e un margine di EBITDA rettificato minimo del 17%. La compagnia ha ribadito le sue stime per il 2024 e ha presentato previsioni per il 2025, compresa una crescita della capacità ASM del 3-5% e un EBITDA rettificato compreso tra 3,4 e 3,8 miliardi di dollari.
La strategia della compagnia aerea si concentra sull'espansione della rete, sul miglioramento dell'esperienza del cliente e sull'espansione costante dei margini, mantenendo una gestione solida del bilancio. Le principali aspirazioni per il 2030 includono il superamento dei 30 miliardi di dollari in ricavi operativi, il raggiungimento di un margine di EBITDA rettificato del 18-20% e la riduzione del numero totale di azioni diluite al di sotto delle 300 milioni di azioni.
Air Canada presentó su plan estratégico a largo plazo en su Día del Inversor 2024, estableciendo objetivos ambiciosos para 2028, que incluyen 30 mil millones de dólares en ingresos operativos y un margen de EBITDA ajustado mínimo del 17%. La compañía reafirmó su guía para 2024 y presentó proyecciones para 2025, que incluyen un crecimiento de la capacidad ASM del 3-5% y un EBITDA ajustado entre 3.4 y 3.8 mil millones de dólares.
La estrategia de la aerolínea se centra en la expansión de la red, la mejora de la experiencia del cliente y la expansión constante de márgenes, mientras mantiene una gestión sólida del balance. Las principales aspiraciones para 2030 incluyen superar los 30 mil millones de dólares en ingresos operativos, alcanzar un margen de EBITDA ajustado del 18-20% y reducir el número total de acciones en circulación por debajo de 300 millones de acciones.
에어캐나다는 2024 투자자 데이에서 장기 전략 계획을 발표하며 2028년 목표로 300억 달러의 운영 수익과 최소 17%의 조정 EBITDA 마진을 설정했습니다. 이 회사는 2024년 가이드를 재확인하고 2025년 전망을 제시했으며, 여기에는 3-5%의 ASM 용량 성장과 34억-38억 달러의 조정 EBITDA가 포함됩니다.
항공사의 전략은 네트워크 확장, 고객 경험 향상 및 안정적인 마진 확장에 중점을 두고 있으며, 강력한 재무 관리를 유지하고 있습니다. 2030년까지의 주요 목표에는 300억 달러 이상의 운영 수익, 18-20%의 조정 EBITDA 마진 달성, 그리고 전체 희석 주식 수를 3억 주 미만으로 줄이는 것이 포함됩니다.
Air Canada a dévoilé son plan stratégique à long terme lors de son Journée des Investisseurs 2024, en fixant des objectifs ambitieux pour 2028, y compris 30 milliards de dollars de revenus d'exploitation et une marge EBITDA ajustée minimale de 17%. La société a confirmé ses prévisions pour 2024 et présenté ses projections pour 2025, y compris une croissance de la capacité ASM de 3-5% et un EBITDA ajusté compris entre 3,4 et 3,8 milliards de dollars.
La stratégie de la compagnie aérienne se concentre sur l'expansion du réseau, l'amélioration de l'expérience client et l'expansion constante des marges, tout en maintenant une gestion solide de son bilan. Les principales aspirations pour 2030 incluent le dépassement de 30 milliards de dollars en revenus d'exploitation, l'atteinte d'une marge EBITDA ajustée de 18-20% et la réduction du nombre total d'actions diluées en dessous de 300 millions d'actions.
Air Canada hat auf ihrem Investor Day 2024 ihren langfristigen strategischen Plan vorgestellt und ehrgeizige 2028-Ziele festgelegt, darunter 30 Milliarden Dollar an Betriebseinnahmen und eine minimale 17% angepasste EBITDA-Marge. Das Unternehmen hat seine Prognose für 2024 bekräftigt und Prognosen für 2025 vorgestellt, einschließlich eines Wachstums der ASM-Kapazität von 3-5% und einem angepassten EBITDA zwischen 3,4 und 3,8 Milliarden Dollar.
Die Strategie der Fluggesellschaft konzentriert sich auf die Erweiterung des Netzwerks, die Verbesserung der Kundenerfahrung und die konsistente Margenausweitung bei gleichzeitig solidem Bilanzmanagement. Zu den wichtigsten Zielen für 2030 gehören die Überschreitung von 30 Milliarden Dollar an Betriebseinnahmen, das Erreichen einer angepassten EBITDA-Marge von 18-20% und die Reduzierung der vollständig verwässerten Aktienanzahl auf unter 300 Millionen Aktien.
- Target of $30 billion operating revenues by 2028, up from $21.833 billion in 2023
- Projected EBITDA margin improvement to ≥17% by 2028
- Planned reduction in share count to below 300 million shares by 2028
- Strong 2023 performance with $2.756 billion free cash flow
- Network expansion strategy with 5% capacity increase guidance for 2024
- Expected decline in adjusted EBITDA from $3.982B in 2023 to approximately $3.5B in 2024
- Projected increase in adjusted CASM by 2% in 2024
- Forecasted breakeven free cash flow (+/- $200M) for 2025, down from $2.756B in 2023
- Accelerated commercial growth strategy grounded on strong foundation built over the last decade and leveraging many opportunities ahead
- Focus on margin expansion, consistent cash generation to invest in the business and create long-term value for shareholders
- Capital allocation objectives with disciplined balance sheet management and responsible risk profile
- Air Canada reaffirms full year 2024 guidance and shares expectations for certain financial measures for the full year
- 2025 full year guidance, financial targets for 2028, and long-term aspiration shared
"We are proud and excited to share Air Canada's ambitions. We are announcing a long-term plan grounded on a proven commercial strategy. 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. Our plan includes expanding the network, improving the customer experience, taking care of our employees, enhancing financial performance and continuously investing in the business to generate long-term value for investors, while being mindful of the interests of our stakeholders. We believe we are very well positioned to execute our long-term plans," said Michael Rousseau, President and Chief Executive Officer of Air Canada.
At the 2024 Investor Day, Mr. Rousseau and members of the executive team will provide details on Air Canada's strategy, investment thesis and financial targets.
Outlook
Air Canada is reiterating the full year 2024 guidance provided in Air Canada's news release dated November 1, 2024, and is providing guidance for the full year 2025.
Metric | 2023 | 2024 | 2025 |
ASM capacity | 99.012 billion | Approximately | Between |
Adjusted CASM* | 13.49 ¢ | Approximately | Between 14.25 ¢ |
Operating expenses | Not guided | Not guided | |
Adjusted EBITDA* | Approximately | Between | |
Operating income | Not guided | Not guided | |
Free cash flow* | Not guided | Breakeven +/- | |
Net cash flows from | Not guided | Not guided |
Major Assumptions
Air Canada made assumptions in providing its 2024 and 2025 guidance—including moderate Canadian GDP growth for 2024 and 2025. Air Canada also assumes that the Canadian dollar will trade on average, at
In addition, Air Canada shared its expectations for certain financial measures for the full year 2024, its long-term 2028 financial targets and 2030 aspirations which are described below, and which will be discussed during its Investor Day presentations.
Metric | 2023 | 2024 | 2028 | 2030 |
Operating revenues | Approximately | Approximately | Exceed | |
Adjusted EBITDA | 18 % | Approximately | Greater than or | Between |
Operating margin | 10 % | Not provided | Not provided | Not provided |
Net cash flows from | 108 % | Greater than | Approximately | Approximately |
Additions to property, | 7 % | Approximately | Lower than or | Lower than |
Free cash flow margin* | 13 % | Between | Approximately | Approximately |
Return on invested | 18 % | Not provided | Not provided | Greater than or |
Fully diluted share | Approximately | Not provided | Lower than 300 | Lower than 300 |
1Percentage amounts in the table above may not calculate exactly due to rounding.
The 2028 long-term targets and 2030 aspirations provided in this news release do not constitute guidance or outlook, but rather are provided for the purpose of assisting the reader in measuring progress toward Air Canada's objectives. The reader is cautioned that using this information for other purposes may be inappropriate. Air Canada may review and revise these targets and aspirations including as economic, geopolitical, market and regulatory environments change. These targets and aspirations are used as goals as Air Canada executes on its strategic priorities, and they assume a normal business environment. Air Canada's ability to achieve these targets and aspirations is also dependent on its success in achieving initiatives and business objectives that are described in the 2024 Investor Day presentations which will be available shortly after the event at aircanada.com/investors, including, but not limited to, those relating to increasing revenues, growing fleet and network capacity, and successfully executing on other key investments and initiatives, as well as other major assumptions, including those described in this news release, and are subject to a number of risks and uncertainties.
Please see the section below entitled "Caution Regarding Forward-Looking Information".
* Non-GAAP Financial Measures
Adjusted CASM, adjusted EBITDA, adjusted EBITDA margin, free cash flow, net cash flows from operating activities as a percentage of adjusted EBITDA, additions to property, equipment and intangible assets as a percentage of operating revenues, free cash flow margin and return on invested capital are each non-GAAP financial measures or non-GAAP ratios. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results.
Air Canada uses non-GAAP financial measures and ratios to provide readers with additional information on its financial and operating performance. Non-GAAP financial measures or ratios typically have exclusions or adjustments that include one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded because Air Canada believes these may distort the analysis of certain business trends and render comparative analysis across periods less meaningful and their exclusion generally allows for a more meaningful analysis of Air Canada's operating expense performance and may allow for a more meaningful comparison to other airlines.
Net cash flows from operating activities as a percentage of adjusted EBITDA
Air Canada uses net cash flows from operating activities as a percentage of adjusted EBITDA to measure cash conversion from adjusted EBITDA. This measure is defined as the ratio of net cash flows from operating activities to adjusted EBITDA.
Additions to property, equipment and intangible assets as a percentage of operating revenues
Air Canada uses additions to property, equipment and intangible assets as a percentage of operating revenues to measure the proportion of operating revenues that are reinvested as capital expenditures. This measure is defined as the ratio of additions to property, equipment and intangible assets to operating revenues.
Free cash flow margin
Air Canada uses free cash flow margin to measure the amount its free cash flow represents as a percentage of operating revenues. This measure is defined as the ratio of free cash flow to operating revenues.
Return on invested capital
Air Canada uses return on invested capital (ROIC) to assess the efficiency with which it allocates its capital to generate returns. ROIC is calculated as the ratio of adjusted pre-tax income (loss), excluding interest expense, to invested capital. Invested capital includes average year-over-year long-term debt and lease obligations, average year-over-year shareholders' equity, and the embedded derivative on Air Canada's convertible notes. In 2020, Air Canada issued convertible unsecured notes. Air Canada has the option to deliver cash or a combination of cash and shares on the conversion date in lieu of shares, giving rise to an embedded derivative that is included as part of the definition of capital. Air Canada calculates invested capital on a book value-based method when calculating ROIC.
Refer to Air Canada's public disclosure file available at www.sedarplus.ca and, in particular Air Canada's Third Quarter news release dated November 1, 2024, and sections 16 and 20 (Non-GAAP Financial Measures), respectively, of Air Canada's Third Quarter 2024 MD&A and 2023 MD&A (which sections are incorporated by reference herein) for an explanation of the composition of Air Canada's other non-GAAP financial measures and non-GAAP ratios referred to in this news release and for a reconciliation to the most comparable GAAP financial measure.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This news release includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may involve, but are not limited to, comments relating to guidance, strategies, expectations, planned operations or future actions. Forward-looking statements are identified using terms and phrases such as "preliminary", "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions.
Forward-looking statements, by their nature, are based on assumptions including those described herein and are subject to important risks and uncertainties. Forward-looking statements cannot be relied upon due to, among other things, changing external events and general uncertainties of the business of Air Canada. Actual results may differ materially from results indicated in forward-looking statements due to a number of factors, including those discussed below.
Factors that may cause results to differ materially from results indicated in forward-looking statements include economic conditions as well as geopolitical conditions such as the military conflicts in the
Air Canada has and continues to establish targets, make commitments and assess the impact regarding climate change, and related initiatives, plans and proposals that Air Canada and other stakeholders (including government, regulatory and other bodies) are pursuing in relation to climate change and carbon emissions. The achievement of our commitments and targets depends on many factors, including the combined actions of governments, industry, suppliers and other stakeholders and actors, as well as the development and implementation of new technologies. In particular, our 2030 carbon emission-related targets and our related 2050 aspiration are ambitious and heavily dependent on new technologies, renewable energies and the availability of a sufficient supply of sustainable aviation fuels (SAF), which continues to present serious challenges. In addition, Air Canada has incurred, and expects to continue to incur, costs to achieve its goal of net-zero carbon emissions and to comply with environmental sustainability legislation and regulation and other standards and accords. The precise nature of future binding or non-binding legislation, regulation, standards and accords, on which local and international stakeholders are increasingly focusing, cannot be predicted with any degree of certainty, nor can their financial, operational or other impact. There can be no assurance of the extent to which any of our climate goals will be achieved or that any future investments that we make in furtherance of achieving our climate goals will produce the expected results or meet increasing stakeholder environmental, social and governance expectations. Moreover, future events could lead Air Canada to prioritize other nearer-term interests over progressing toward our current climate goals based on business strategy, economic, regulatory and social factors, and potential pressure from investors, activist groups or other stakeholders. If we are unable to meet or properly report on our progress toward achieving our climate change goals and commitments, we could face adverse publicity and reactions from investors, customers, advocacy groups or other stakeholders, which could result in reputational harm or other adverse effects to Air Canada.
The forward-looking statements contained or incorporated by reference in this news release represent Air Canada's expectations as of the date of this news release (or as of the date they are otherwise stated to be made) and are subject to change after such date. However, Air Canada disclaims any intention or obligation to update or revise any forward-looking statements whether because of new information, future events or otherwise, except as required under applicable securities regulations.
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Internet: aircanada.com/investors
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