Air Canada has outlined its growth strategy to reach $30 billion in operating revenue by 2028. This ambitious plan focuses on boosting profitability, enhancing the customer experience, and expanding its market reach.
President and CEO Michael Rousseau emphasized the company’s track record and confidence in its strategy stating to Travel Radar:
Our plan includes expanding the network, improving the customer experience, taking care of our employees, enhancing financial performance, and continuously investing in the business to generate long-term value for investors while being mindful of the interests of our stakeholders. We believe we are very well positioned to execute our long-term plans.
Short-Term Goals: Air Canada’s $30 Billion Revenue Plan
For 2024, Air Canada’s growth strategy expects a 5% increase in available seat miles (ASM), a key measure of passenger capacity. However, the airline anticipates an approximate 2% rise in adjusted cost per available seat mile (CASM), reaching 13.75 cents. Air Canada projects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a key profitability metric, to total $3.5 billion, down from $3.98 billion in 2023.
In 2025, Air Canada forecasts continued ASM growth of 3% to 5%. Adjusted CASM will likely range from 14.25 cents to 14.50 cents, while the airline expects adjusted EBITDA to fall between $3.4 billion and $3.8 billion. The airline also expects free cash flow to break even in 2025, with a $200 million variance.
Long-Term Targets for Air Canada’s $30 Billion Vision
Air Canada’s long-term growth strategy focuses on reaching $30 billion in operating revenue by 2028. The airline targets an adjusted EBITDA margin of at least 17% by then. It hopes to achieve between 18% and 20% by 2030. The company expects a free cash flow margin of 4-5% through 2030. It also aims for a return on invested capital of at least 12% by 2030. Air Canada plans to reduce its fully diluted share count to under 300 million by 2028 and 2030.
It’s important to note that Air Canada’s long-term growth strategy targets are not guaranteed. The 2028 and 2030 goals “do not constitute guidance or outlook,” the company clarified. These projections are designed to serve as a framework for tracking progress. Air Canada emphasized that external factors, such as economic conditions, geopolitical events, and regulatory changes, could impact the achievement of these goals.
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