Air Canada

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Air Canada's first quarter earnings 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. To ask a question, simply press star 1 on your telephone keypad. To withdraw your question, press star 1 again. It is now my pleasure to turn the call over to Amanda Marie, head of investor relations, You may go ahead. Thank you, Tina.

Hello, bonjour, et bienvenue à notre revue des résultats du premier trimestre 2026. Welcome to Air Canada's first quarter 2026 earnings call. Thank you for joining us today. On the call with me are Michael Rousseau, our President and Chief Executive Officer, Mark Gallardo, our Chief Commercial Officer and President of Cargo, and John Deibert, our Chief Financial Officer. Other members of our executive team are also with us and available for the Q&A portion of the call. Before we begin, I remind everyone that today's discussion may contain forward-looking information regarding Air Canada's outlook, objectives, and strategies. Actual results could differ materially due to various assumptions, risks, and uncertainties. Please refer to our Q1 2026 earnings release are 2025 full year and 2026 first quarter MD&A and filings available on aircanada.com and on CEDAR+. With that, I will turn the call over to Mike.

Thank you, Amanda. Bonjour, everyone. Thank you for joining us today. Before I begin, I'd like to acknowledge the recent incident at LaGuardia Airport. On behalf of everyone at Air Canada, I want to express my sincere condolences and sympathy to those affected. Our thoughts are with the passengers, crews, firefighters and families impacted. Safety remains the foundation of our industry and our first priority, which is why we remain engaged with the U.S. and Canadian authorities as they continue their investigation of this incident. I also want to thank the employees who helped in our emergency response by supporting the families of affected passengers and crew, taking care of our customers and keeping the operations running. Turning to our results, in the first quarter, we delivered a year-over-year growth of 61% in adjusted EBITDA, reflecting disciplined execution in a volatile operating environment. I truly believe the last two consecutive quarters of record results reflects the underlying strength of our plan and business model, and all stakeholders should be extremely excited as we move into the growth phase of our long-term strategy. We continue to make progress on our New Frontiers objectives, supported by the strength of our diversified network, premium positioning, and loyal customer base. This gives us the flexibility to align capacity with demand across the year and deploy it where returns are the most attractive, a capability that was evident in the first quarter, reflected in strong passenger revenues, solid premium and corporate performances, and healthy results at our Canada vacations. Since late February, the situation in the Middle East and the sharp increase in global jet fuel prices have created a significant external shock for our industry, The pace of that increase is testing demand resilience across commercial aviation and reinforcing the need for discipline. This is not unique to Air Canada. It is an industry-wide challenge that affects how airlines think about capacity, pricing, and risk. In this environment, our focus is on staying flexible, making deliberate decisions, and managing the business to prioritize returns and protect cash flow and balance sheet strength. With this backdrop, we suspended our full-year guidance and provided Q2 guidance. The Q2 guidance reflects our expectation to offset about 50% to 60% of the incremental fuel expense through disciplined commercial and cost actions. Despite fuel-driven fare increases, we continue to see strong demand across the network and throughout the booking curve. History shows that in periods like this, airlines with scale, diversified networks, premium demand exposure, strong brand, and resilient balance sheets are better positioned to navigate turbulence and emerge stronger. Air Canada has these attributes, and we are laser-focused on discipline execution, prioritizing returns, and cash generation, and continuing to strengthen the business for the long term. Importantly, strengthening our business means taking care of our people. I'm pleased to say we successfully negotiated two new labor contracts agreements with Unifor for our pilot and flight attendant crew scheduling teams during the first quarter. This reflects our continued commitment to constructive, direct union management relations and to fostering a workplace where collaboration drives long-term success. In the operations, this quarter was another reminder of how much progress the team has made. Q1 brought several challenges, unusually cold winter, various ice storms, disruption in certain sun destinations, and as I noted, the evolving conditions in the Middle East. In each case, our operations teams responded with focus and compassion, keeping the airline moving and taking care of our customers. I want to thank our employee, Their dedication and professionalism are at the core of the Air Canada brand and important contributors to the sequential improvements in customer sentiment. That connection between our people and our customers is fundamental to who we are as an airline. It is what will continue to strengthen Air Canada. As we look ahead, we are entering an important phase of fleet and product advancement. We recently took delivery of our first Airbus 321XLR, which is scheduled to take its inaugural flight on June 15th. With additional aircraft deliveries expected this year, along with two 787-10s, these aircrafts will strengthen our premium offering. We have completed seven Boeing 737 MAX conversions to Air Canada Rouge and are on track for 45 by year end. Together, our people, investments, and fleet Product, digital, and customer experience puts us in a solid position to take advantage of as opportunities arise and to execute on our new frontier objectives. Before I wrap up, I announced my upcoming retirement last month after close to two decades with Air Canada. I look forward to supporting our company through this important transition period. I firmly believe Air Canada will continue its flight path from a position of strength with a dynamic leadership team, strong balance sheet, and a clear strategy. I'm confident the company is well positioned to continue building on the progress we've made. Thank you. Over to you, Marc.