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 you to the Air Canada to present fourth quarter and full year 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you would like to ask a question at that time, Simply press star followed by the number 1 on your telephone keypad. And if you'd like to withdraw that question, again, press star 1. Thank you. I would now like to turn the conference over to Amanda Murray, Head of Financial Planning, Strategy, and Investor Relations. Amanda, please go ahead. Thank you, Krista. Hello.

Bonjour. Et bienvenue à notre revue des résultats du quatrième trimestre et de l'exercice 2025. Welcome. And thank you for joining our fourth quarter and year-end 2025 earnings call. My name is Amanda Murray, and I am pleased to hold the role of Head of Financial Planning, Strategy, and Investor Relations at Air Canada. I look forward to working with the capital markets and fostering strong relationships with our investment community. Joining us on the call are Michael Rousseau, our President and CEO, Mark Gallardo, our CCO and President of Cargo, and John DeBert, our CFO. Other executives are with us and available for the Q&A portion of the call. 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.

Great. Thank you, Amanda, and welcome. Bonjour. Before I begin, I want to give a special welcome to Amanda on her first call. I know Amanda will do a great job with our analysts and shareholders. And for those of you who don't know, Valerie Durant was promoted to another role within AirCanada. We delivered a strong 2025 with an exceptional Q4, showcasing the robustness of our business plan and the structural advantages we have built over several years. Q4 revenues reached $5.8 billion, up nearly 7% year-over-year, supported by industry-leading passenger unit revenue performance and strong premium demand. We also achieved record Q4 adjusted EBITDA of $867 million, a 25% increase from last year. Our network and revenue diversity played a critical role in delivering strong results in 2025. Key elements enabled us to mitigate the softness in transporter markets, which has remained relatively steady from a trend perspective over the past year. These include the scale of our hubs, strength of our international franchise, and our continued sixth freedom growth. The loyalty of our premium and corporate customers and the meaningful contributions from AeroPlant Air Canada cargo and Air Canada vacations reinforce our results as well. This year marked a clear step forward in balancing out our traditional seasonality in our business. In 2025, we achieved total revenues of $22.4 billion, a 1% increase from 2024. Adjusted EBITDA totaled $3.1 billion, coming in ahead of our guidance range due to a very strong demand in the last two months of the year. We continued to demonstrate financial discipline, maintaining a high conversion from earnings to operating cash flow. This enabled us to invest confidently in our future, deploying $2.9 billion in capital investments. We did this while maintaining a solid balance sheet with $7.5 billion in liquidity and a net leverage of 1.7 times, and generating $747 million in pre-cash flow. At the same time, we returned more than $850 million to shareholders, through share repurchases. These actions reflect a balanced approach to capital allocation and our commitment to creating long-term, sustainable value. Operationally, 2025 was another year that demonstrated the dedication and professionalism of all our teams. We remained focused on operational excellence and improved both our on-time performance and net promoter score by strengthening the overall dependability of our schedule and the premium brand position. Recently, our teams again rose to the challenge as Toronto and many cities in North America experienced record snowfall and extreme cold. Managing through severe weather safely and effectively while keeping our operation moving is no easy feat. These moments reflect the strength, the teamwork, and the commitment of our people, and they continue to reinforce customer trust in Air Canada. I thank all of our employees for their hard work and dedication. The reference recognized by our customers who voted Air Canada the best airline in North America at the 2025 Skytrax World Airline Awards, along with wins in eight additional categories, more than any other Canadian carrier. Skytrax also named us as the only North American airline in its global top 20, a testament to the professionalism and commitment of our people. I know we are the employer of choice for aerospace in Canada. And now more than ever, as Canada needs global champions, we stand as one. We will continue to contribute meaningfully to the Canadian economy and create value for all stakeholders. Finally, as we look ahead, we're encouraged by the momentum being carried in 2026. We will continue to drive our commercial strategy, preserve a disciplined financial framework, and continuously improve the customer experience. Against this backdrop, 2026 will be a transitional year as we absorb cost pressures and receive the majority of our new fleet deliveries that are scheduled for the second half of the year. We're very confident our investments are setting the stage for improved performance and greater efficiencies in 2027 and beyond. We are building for the long term, and I'm convinced the decisions we're making today will continue to strengthen our airline for years to come. And I'll pass it over to Mark.