Air Canada

Good morning and welcome to Air Canada's second quarter 2023 results conference call. All participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. To ask a question, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Valérie Durand, Head of Investor Relations. Thank you. Please go ahead.

Thank you, Julianne. Hello, bonjour, et bienvenue à notre deuxième revue trimestrielle de 2023. Welcome and thank you for attending our second quarter earnings call of 2023. Joining us this morning are Michael Russo, our President and CEO, Mark Gallardo, our Executive Vice President of Revenue and Network Planning, and John Deibert, our new Executive Vice President and CFO. Welcome on board, John. Also in the room today are Yann Melon-Wechsler, Executive Vice President and Chief HR Officer in Public Affairs. Marc Barbeau, Executive Vice President and Chief Legal Officer. Marc Nazer, Executive Vice President of Marketing and Digital and President at Aeroplan. And Kevin O'Connor, Senior Vice President, Global Air Force and Operations Control. To begin, Mike will give us a brief overview of the quarter. Mark will talk about our revenue, network, and demand trends, and John will touch on financial performance and guidance before turning it back to Mike. Following this, we will take questions from equity analysts. Our comments and discussions today may contain forward-looking information about Air Canada's outlook, objectives, and strategies that are based on assumptions and subject to certain risks and uncertainties. Our actual results could differ materially from any stated expectation. Please refer to our forward-looking statement in Air Canada's second quarter news release that is available on aircanada.com and on CDAR. And now, I'd like to turn over the call to Mike.

Great. Thank you, Valerie, and good morning to everyone. Thank you for joining us. And John, welcome to Air Canada. I look forward to seeing your leadership help our entire company and the finance organization continue to excel. Our quarterly operating revenues reached $5.4 billion, up 36% from the second quarter of 2022. Operating income totals $802 million, a year-over-year improvement of over $1 billion. Adjusted EBITDA of $1.2 billion was up by more than $1 billion as well in the same period last year. Our adjusted EBITDA margin reached 22.5%. We carried more than 11 million customers over the quarter. That is a 23% greater than in the same period of last year. Traffic growth outpaced capacity growth with an impressive system load factor nearing 88% in the quarter. And this continues. Our load factor reached almost 91% in July, reflecting the overall strong summer demand. Passenger revenues totaled $4.9 billion, about 42% higher than a year ago. As we look ahead, advanced passenger bookings remain solid for the balance of 2023 and now into Q1 2024. Mark will expand on the demand environment in his remarks. I thank the entire team for their dedication to customer service and for collaborating with our partners who also share the responsibility of ensuring a smooth customer journey. And I congratulate all employees on delivering a strong order. and recently winning some very important awards. These include the recognition of our people's spirit and expertise at the 2023 Skytrax World Airline Awards in June. For Canada, our employees won the Best Airline Staff and Best Airline. Air Canada Rouge also won Skytrax Best Low-Cost Airline. And Air Canada received the inaugural Global Awards of World's Most Family-Friendly Airline. These are significant as they mark us as a leader in leisure travel. We're all very proud of these awards, but know there's still work ahead of us. We had more employees trained, better coordination with our key ecosystem partners, and improved tools than last summer, which resulted in strong operational results in both April and May. Yet our June and July operations were not at expected levels due to several factors. We are increasing our efforts to protect the customer journey from disruption, regardless of the cost. This includes using any influence we have in such instances of attrition at our principal regional partner or global supply chain issues, or working to mitigate the effects of situations beyond our control, such as increasing disruptive storm activity in our key hubs and markets. We are confident that our efforts will generate positive outcomes. Cost, discipline, and deleveraging remain top priorities for us, and John will cover both in more detail. We ended the quarter with $9.6 billion in cash and cash equivalents and investments. That includes an early repayment of $650 million in EDC loans in the quarter. Our cash position enables us to confidently execute our business plans, move forward with new initiatives, and continuously invest in customer service. I thank our customers for entrusting their travel to us and for their loyalty. We're more determined than ever to deepen this loyalty through elevated customer service. And Marc, over to you.