Air Canada (AC) Q4 2024 earnings summary

Executive summary

• Achieved record full-year revenue of CAD 22.3 billion in 2024, up 2% year-over-year, with Q4 revenues over CAD 5.4 billion, up 4% year-over-year.

• Transported more than 47 million passengers in 2024 and completed the buyback and cancellation of over 20 million shares.

• Delivered strong Q4 results despite labor uncertainty, secured a new pilot agreement, improved on-time performance by eight points, and repurchased over 35 million shares.

• Adapted to market conditions and completed a new pilot contract with limited disruption.

Financial highlights

• Adjusted EBITDA reached CAD 3.6 billion, slightly above guidance, with Free Cash Flow of CAD 1.3 billion and Adjusted Pre-tax Income of CAD 1.4 billion.

• Q4 Adjusted EBITDA was CAD 696 million (12.9% margin), up CAD 175 million year-over-year.

• Full year net income was CAD 1.72 billion, with diluted EPS of CAD 4.72; adjusted net income was CAD 1.335 billion, with adjusted EPS of CAD 3.55.

• Operating expenses grew 7% year-over-year; salaries, wages, and benefits up 11% excluding a one-time pension charge.

• Free cash flow for 2024 was CAD 1.294 billion, down CAD 1.462 billion year-over-year; Q4 free cash flow was negative CAD 495 million.

Outlook and guidance

• 2025 guidance maintained as provided at Investor Day, with adjusted EBITDA of CAD 3.4–3.8 billion, ASM capacity up 3–5%, and free cash flow around break-even (+/- CAD 200 million).

• 2028 targets: operating revenues of CAD 30 billion, at least 17% Adjusted EBITDA margin, ~5% Free Cash Flow margin, and diluted share count below 300 million.

• Revenue environment from Q4 2024 is continuing into 2025, with stable demand and positive booking/yield trends for Q2 and Q3.

• Assumptions include moderate Canadian GDP growth, C$1.40/USD exchange rate, and jet fuel at C$0.95/litre.

• Monitoring potential impacts from tariffs and currency volatility, but current guidance does not assume such impacts.