Air Canada’s 2023 results show that our airline has truly recovered from the pandemic. We generated record operating revenue during the year and, for first time since 2019, we reported a full year profit.

For 2023, we had operating revenue of $21.8 billion, up more than $5 billion from 2022. Full year operating income was nearly $2.3 billion. Net income was almost $2.3 billion, versus a loss of $1.7 billion in the prior year, a $4 billion improvement.

In 2023, we carried 46 million passengers, more than the entire population of Canada. Most importantly, we carried them safely, which is always our highest priority.

We saw considerable improvement year-over-year in key operational metrics.

Our on-time arrivals-at-14 rose by nearly 10 percentage points above 2022 and were above 2019 levels for the fourth quarter.  This positive trend has continued into 2024.

We have seen increased customer satisfaction across the entire system, with our most significant areas of improvement being the handling of disruptions and missed connections.

While more work remains to be done, our achievements were recognized globally during the year. This included for Best Airline in Canada and Best Airline Staff in Canada at the Skytrax World Airline Awards.

And there were many other awards, too, including for service, product, Aeroplan and employee relations.

Four Priorities

We achieved this success by concentrating on four guiding priorities that also help to reinforce our strategy with all our 39,000 employees so they can work in a coordinated fashion on shared goals.

The first of these is to Fund our Future.

At its core, this ongoing priority means earnings and revenue generation.

It also includes a continued focus on cost control and balance sheet management. Keeping expenses down and meeting our cost and EBITDA guidance will remain our top financial goals.

And it is also why in 2023 we reduced our net debt by nearly $3 billion, including by aggressively prepaying our more expensive debt.

This has continued with a financing transaction earlier this month, which included the repayment of US$1.1 billion dollars in senior debt, the refinancing of other debt and increasing our revolving credit facility.

Our leverage ratio is now solidly back to pre-pandemic levels.

We ended 2023 at 1.1X EBITDA. This is a significant improvement from a leverage ratio of 5.1 at the start of the year.

In addition, we had total liquidity of $10.3 billion at year end.

And we increased our unencumbered asset pool to $6.6 billion, excluding the value of Aeroplan.

These achievements give us the resources to take advantage of opportunities and add an important layer of resiliency to manage the temporary and structural headwinds impacting our industry.

Our strong balance sheet and liquidity levels also enable us to take a long-term perspective.  This includes our scheduled fleet plan additions, investments in technology, and advancing our climate action strategy.

There are many examples of this:

• We invested another US$5 million, for a total of $10 million, in Swedish hybrid-electric airplane maker Heart Aerospace.

• We became the first airline in North America to sign up for the Airbus Carbon Capture Offer

• We are investing in upgrades to equipment, technology and information systems to support our employees and customers, such as a baggage tracker in the Air Canada Mobile App, a Canadian first.

• And we launched our New Distribution Capability to make it easier for the vital sales agency community to work with us, making our full inventory more readily available to our customers.

Reach New Frontiers

Our next priority is to reach New Frontiers.  

This is the most visible and fun part of the business because we are adding exciting new destinations around the world to our network.

Throughout 2023, we announced new destinations, restored routes, added frequencies, and made other strategic adjustments mainly aimed at strengthening our key hubs and ensuring our resiliency.

We increased operating capacity by 20% from 2022 and we flew to 188 destinations, with an average of 1,025 daily flights, up from 945 a year earlier.

Internationally, we relaunched, extended, or increased frequencies on 34 routes across the Atlantic and Pacific.

This is not only exciting, but profitable.  We saw a 50% increase in our 2023 passenger revenues from international services over 2022, and these services accounted for about 65% of the growth in total passenger revenues.

This highlights the strength of our network and our position as Canada’s leading global airline.

2023 was also a very good year for sun and leisure destinations, with ground package revenues at Air Canada Vacations driving a 43% year over year increase in other revenues.

Within North America, we grew capacity on nearly 70% of all routes served.

In Canada we resumed seasonal routes, increased frequencies on others, and launched non-stop services with the help of Air Canada Express.

We restored 13 transborder routes and increased frequency on over a dozen others to the U.S.

This year, we will continue to launch new services, including a new route from Vancouver to Singapore this spring and shortly thereafter new flights to Stockholm from Toronto and Montreal.

Extending our international reach are strong partnerships with other carriers. Foremost is the Star Alliance and it is enhanced by other joint business agreements, codeshare relationships and interline agreements.

For example, our relatively new agreements with Emirates and flydubai are opening opportunities in Southeast Asia, a market of great potential.

Our network expansion also creates synergies with Air Canada Cargo.

The cargo division is present in more than 50 countries with hubs in Montreal, Toronto, Vancouver, Chicago, London and Frankfurt.

As our dedicated air freight division, it leverages Air Canada’s passenger flights, its own freighter flights, and other modes of transport, such as trucking services.

It was recognized early this year when it was named Cargo Operator of the Year by ATW, citing its customer-friendly adoption of digital technologies.

Long term, cargo will continue to feature in Air Canada’s diversification strategy. For example, significant additional capacity will become available as we induct 787-10s with their larger cargo capacity into our fleet in the coming years.

There are other frontiers that we are also exploring.  This includes building on our long-standing use of advanced technology to explore how GenAI might make a difference in our business and operations.

And next winter we will become the first airline in the world to test a new aircraft de-icing system.  It uses heating strips that melt the ice instead of having it removed during a stop at a de-icing bay before take-off.

This will not only save travel time but is also expected to yield environmental benefits with less chemical de-icing and reduced fuel burn.

Elevate our Customers

With the end of COVID restrictions, we have seen fierce competition in our industry. In fact, it now takes six airport billboards to list all the airlines that fly to our Toronto-Pearson global hub.

This competition means customer service is even more important, and so we have made elevating the customer experience another corporate priority.

Through our multi-year ECX program, we are continuously refining our services. We are doing this with technology enhancements and training programs, and by engaging regularly with our customers.

In 2023, we delivered on 41 initiatives related to on-time performance, customer insights and communications, disruption handling and recovery, employee engagement and service excellence.

We also accelerated initiatives for our customers with disabilities.  It is an ongoing focus area as we work to remove barriers for both customers and employees.

In 2023 we had approximately 1.3 million requests for special assistance.

While the overwhelming majority of these customers travelled with no issues, we know we must do better.  To this end, in 2023 almost 17,500 employees completed training to better serve customers with disabilities.

I am proud of the leadership we are showing.  In the past few months, we became the first carrier in North America to offer the Sunflower program for customers with non-visible disabilities and the first airline in Canada to offer real-time, tracking capability for those who check their mobility aids.

We are also investing significantly in improving our product in airports and on our aircraft.  In this regard, three new premium airport lounges were opened –

in San Francisco, Newark and Toronto-Island – bringing Air Canada’s network of lounges to 29 worldwide.

We expanded in-flight food and beverage offerings to suit a variety of tastes, such as with the recent announcement of more than 100 rotating options on our onboard menu.

We also launched pre-ordering of in-flight meals for Air Canada Signature Class and Premium Economy customers on international flights from Canada.

This not only helps to meet customer preferences but also reduces waste, contributing to our sustainability goals.

When flying, customers now have a tremendous range of entertainment options. This includes free Wi-Fi texting for Aeroplan members through a multi-year partnership with Bell.  We also offer Live TV in North America.

And there has been a more than 200% increase in the amount of onboard content through collaborations with industry leaders such as Apple, Audible and Disney. We were the first airline in the world to offer Disney+ Originals, Apple Fitness+ customized meditation videos, Hayu reality TV shows and HBO podcasts.

We’ve also elevated our customers’ experiences through Aeroplan.

It’s hard to overstate how effective our program has been as an essential driver of loyalty.

Aeroplan Elite Status recognizes Air Canada’s frequent flyers and provides meaningful awards to the program’s most engaged members with a range of priority travel services and member benefits.

Aeroplan is also being improved by offering more value to less frequent travellers. Taken together, the program is an incredible competitive advantage.

It has been five years since we acquired Aeroplan, and it has built itself into Canada’s leading travel loyalty program.  Key to the award-winning program’s success has been its strategy to affiliate with top brands to generate everyday engagement.

Aeroplan has grown to more than 8 million members — roughly double since the acquisition.  The program’s contribution to our bottom line has also grown and we are excited by the many opportunities we see ahead.

ESG

We know the importance that our customers and stakeholders place on corporate responsibility, especially with regard to the environment.

During the year, we moved forward on our climate plan through our commitments for new aircraft and carbon capture technology.  We also took many smaller, relatable measures, such as shoreline cleanups, new bamboo cutlery, and the expansion of our beehives program.

For our efforts, we won the sustainable airline award at BTN Group’s inaugural Business Travel Sustainability Awards.

SAF is key to our industry’s environmental strategy, and we announced agreements to purchase sustainable aviation fuels in San Francisco and Amsterdam from Neste.

We urge governments in our country to seize this global opportunity. Canada must recognize the potential of SAF, both commercially and for our environment, and invest appropriately in the development of these fuels, as other countries do.

For a country as big as ours, transportation is more crucial than in many other places.

Lift Each Other Up

Our final priority relates to our people. It is perhaps the most important one of all, in that people enact all our other priorities - we must lift each other up.

In 2023 alone, Air Canada hired more than 8,000 new employees.

By the fourth quarter we had on average 9% more people on a full-time equivalent basis than before the pandemic in 2019, strengthening our operational resiliency.

We have emphasized training and invested in our employees’ growth and development so they can better serve customers.  We do that by using the latest tools, technology and teaching methods.  These optimize engagement, support skills development, and encourage the acquisition and transfer of knowledge.

We also work hard to develop our culture and foster unity of purpose.

As part of this, we held 32 employee town halls across Canada in 2023 to give employees insight and gather their feedback on our vision, plans, and goals as we continue to rise higher.

Integral to our culture is diversity and inclusion, beginning with an emphasis on bilingualism and the promotion of Canada’s two Official Languages.  Apart from meeting our obligations as Canada’s only airline subject to the Official Languages Act, we are proud that customers are served, and our employees can work, in the Official Language of their choice.

Beyond this, a diverse and inclusive workplace is not only in line with our values and aspirations, but it is also a competitive advantage for Air Canada.

It lets us attract and retain the best global talent.  Even more, our customers and stakeholders should see themselves reflected in our employee base.

Our DEI efforts include the implementation of a four pillar strategy, with a DEI Executive Council, DEI Steering Committee, DEI Champions Program, and the formalization of employee resource groups or ERGs.

We are also determined to increase the representation of designated groups in senior management positions.

Lifting each other up also means helping communities through the Air Canada Foundation and sharing the best of Canada with the world — including our passion for sports.  We are proud to be the Inaugural Premier Partner of the Professional Women’s Hockey League and Official Airline for the league’s first six teams.

Our HR practices were recognized frequently during the year, including with awards for such things as workplace engagement and diversity.

Conclusion

I want to conclude by first thanking our 39,000 employees globally for their hard work and dedication.  They safely transported more than 46 million passengers in 2023 and did so with care and class.  Their commitment, shared passion, and professionalism are among the main reasons I am so optimistic about our company’s future.

I also thank our Board of Directors for their support.  I deeply appreciate our board members’ insights and advice.

Finally, I thank our customers for their loyalty and shareholders for their trust and investment. Shareholders can be assured.

We have a strong foundation, solid plans for future investment and growth, and a proven ability to execute on our value-creating strategy.

Our results in 2023 show that our investors can rely on us to work hard to deliver on our commitments far into the future and make meaningful returns.

I look forward to reporting back to you on another successful year at our next Annual Meeting in 2025.

À l’année prochaine, portez-vous bien d’ici-là.

Merci and thank you.