Air Canada (AC) CIBC Eastern Institutional Investor Conference summary

Business performance and strategic highlights

• Revenue resilience and diversification have been key strengths in 2026, with strong demand and effective navigation of fuel price volatility.

• Growth in premiumization, corporate demand, and network strategy has positioned the company well for future expansion.

• Significant progress on balance sheet strength, with leverage reduced to around 1.2x pro forma after Q2 and an active share buyback program nearing completion.

• Sale of a minority stake in the loyalty program at a 21x TTM EBITDA multiple showcased asset value and enabled accelerated share count reduction and balance sheet enhancement.

• Cargo business has grown into a CAD 1 billion franchise, leveraging both freighters and belly freight, with plans to expand capacity by 20%-25% over the next few years.

Capital allocation and growth strategy

• Capital allocation priorities remain: maintain a strong balance sheet, invest in the airline (including new aircraft and infrastructure), and return value to shareholders through buybacks.

• Since 2024, CAD 2.4 billion has been returned to shareholders, reducing share count from 317 million to around 260 million.

• Fleet expansion is central, with a focus on deploying new, fuel-efficient aircraft to support network growth and margin expansion.

• Sixth Freedom strategy targets U.S. niche markets, aiming to double U.S. international market share from 1% to 2% by leveraging new aircraft and synchronized schedules.

Operational and market environment

• Fuel price volatility in 2026 created significant headwinds, but fare increases and resilient demand have largely offset these pressures.

• Premium and business cabins show strong, inelastic demand, while trans-border and domestic markets are robust; Pacific routes face challenges due to overfly restrictions.

• Cargo pricing allows for rapid fuel cost pass-through, supporting stable margins in that segment.

• Industry competitors have generally acted rationally in passing fuel costs to customers, maintaining a healthy market environment.