Air Canada

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Air Canada fourth quarter and full year 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, Simply press star, followed by the number 1 on your telephone keypad. And if you would like to withdraw that question, again, press star 1. Thank you. I would now like to turn the conference over to Valerie Durand, Head of Investor Relations and Corporate Sustainability. Valerie, you may begin.

Thank you, Krista. Hello, bonjour, et bienvenue à notre revue des résultats du quatrième trimestre et de l'exercice 2024. Welcome and thank you for attending our fourth quarter and year-end 2024 earnings call. Joining us this morning are Michael Rousseau, our President and CEO, Mark Gallardo, our EVP of Revenue and Network Planning and President of Cargo, and John Diebert, our EVP and CFO. Other executives are with us as well. Ariane Melul, our Chief Human Resources Officer in Public Affairs, Craig Laundrie, our Chief Operations Officer, Marc Barbeau, our Chief Legal Officer and Corporate Secretary, and Marc Mazur, our EVP of Marketing and Digital and President of Aeroplan. After our prepared remarks, we will take questions from equity analysts. I remind you that today's comments and discussion may contain forward-looking information about Air Canada's outlook, objectives, and strategies that are based on assumptions and subject to risks and uncertainties. Our actual results could differ materially from any stated expectations. please refer to our forward-looking statement in Air Canada's fourth quarter and year-end news release available on aircanada.com and on CDAR+. And now, I'd like to turn the call over to Mike. Thank you.

Thank you, Valerie. Good morning. Bonjour. Thank you for joining us a little bit earlier than usual. Last night, we reported strong fourth quarter year-end results for 2024. This included a record full-year revenue of $22.3 billion. increasing 2% on the 5% increase in capacity. We finished the year with $3.6 billion of adjusted EBITDA, which is just above our adjusted EBITDA guidance communicated on December 17th, 2020. It also generated free cash flow of $1.3 billion and an adjusted pre-tax income of $1.4 billion in 2024. These results reflected a strong revenue environment. Unit revenues turned positive in November and December, having recovered from declines in Q2 and Q3. We are committed on executing on our plan. We have demonstrated our ability to adapt and make the most of the opportunities that arise. I'd like to call out four major achievements. First, we successfully delivered these strong results by recognizing and making changes when needed in the face of the challenges during the year. For instance, the world experienced geopolitical disruption, lagging impact from inflation and lingering supply chain issues. Where necessary, we adjusted course and acted resourcefully, shifting capacity to where it made most sense. Second, we secured a new agreement with our pilots, felt significant disruption to our operations. This also highlights the commitment of all stakeholders to Canada's long-term success and dedication to customers. Third, we saw pronounced operational improvements last year, with an eight-point gain on on-time performance over 2023. Our drive for operational excellence remains continuously on display. And finally, we fought back and canceled over 35 million shares, completing the normal cost issuer bid program that we announced in November. I'm immensely proud of these results, which would not have been achieved without everyone at Air Canada working as one. Our 40,000 employees showed their dedication and professionalism by safely transporting more than 47 million passengers over the course of the year and I commend them for their commitment and their hard work. I also thank our customers for their loyalty to Air Canada. We strive every day to provide them industry-leading products and services. We are already the leading premium carrier in Canada, and we will continue to assert ourselves as a global champion. We are fully focused on executing our strategic plan. That includes managing through any uncertainty, pivoting where needed as we pursue our ambitious goals. At our recent investor day, we shared key targets we set for 2028. These include $30 billion in operating revenues, at least a 17% adjusted EBITDA margin, and approximately 5% free cash flow margin. We continue to be disciplined with our decisions as well as agile. Mark and John will provide more commentary on the year ahead. We have all the necessary tools and attributes to achieve our goals, and we look forward to sharing more updates. Thank you. Mark, over to you. Thanks.