Air Canada (AC) 24th Annual CIBC Eastern Institutional Investor Conference summary

Demand and network performance

• Estimated $375 million revenue impact from the recent strike, mainly in August, with booking softness attributed to labor disruption.

• International network, especially transatlantic and Sixth Freedom traffic, remains strong with extended late-season demand.

• Corporate travel is rebounding across Canadian domestic and U.S. transborder markets, supporting premium cabin performance.

• Canadian domestic leisure faces pressure from increased capacity, while added Chinese carrier capacity impacts some Asian routes.

• Winter destinations in Mexico, Costa Rica, and the Caribbean are performing well for early winter travel.

Premium and yield trends

• Premium cabin revenue grew 5% year-over-year in 2024 and Q2, now representing about 30% of total revenue.

• Premium demand remains structurally strong, with main cabin facing more pressure in certain domestic markets.

• Yields are stable, with no significant discounting post-strike; fuel prices have been steady and are a key factor in yield calculations.

• Booking patterns have normalized quickly after the disruption, with rapid operational recovery.

Labor and cost management

• Next major labor contract negotiation is with mechanics in 2025; recent agreements with pilots and flight attendants have been reached.

• $150 million in cost savings targeted for the year, with ongoing focus on productivity and efficiency through 2026.

• Updated CASM guidance reflects capacity adjustments due to the strike, with cost structure largely unchanged except for variable costs.

• Margin expansion and cost absorption expected to accelerate in late 2026 as new, more efficient fleet additions come online.