Mr. Michael Rousseau reports

AIR CANADA REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS

Air Canada has released its first quarter 2024 financial results.

"Air Canada's solid first quarter results position our airline for a strong performance in 2024. We had operating revenues of $5.2 billion in the quarter, up $339 million from last year. Adjusted EBITDA grew by $42 million year over year to $453 million. I thank our employees for their hard work taking care of our 11 million customers and transporting them safely throughout the quarter. I also commend them for improving our operations, notably a 13 percentage-point increase in system-wide, on-time arrivals, preparing us for an anticipated busy summer period," said Michael Rousseau, President and Chief Executive Officer of Air Canada.

"We are confident in our ability to deliver on our full year 2024 guidance. As we look toward the summer, we see a continued healthy demand environment, and our customers will have a wide range of exciting travel options across Europe, Asia, and North America, for their summer holiday planning.

"In the quarter, we generated over $1 billion of free cash flow, mainly resulting from cash generated from operating activities. Our net debt-to-adjusted EBITDA ratio fell to 0.9 at the quarter's end. We also made further progress in our strategy to deleverage the balance sheet by reducing gross debt. Our accomplishments in this regard have been recognized by the credit rating agency community, more recently with S&P Global Ratings' latest upgrade to 'BB' from 'BB-' at the end of April. For the full year 2024, we remain certain of our ability to generate significant free cash flow. Our strong balance sheet will serve as the foundation on which we will grow our airline through investments in our world-class global network and the deployment of capital allocation strategies that will create sustainable, long-term value, for all of Air Canada and its shareholders," said Mr. Rousseau.

First Quarter 2024 Financial Results

• Operating revenues of $5.226 billion increased $339 million or 7% on an operated capacity growth of 11% year over year.
• Operating expenses of $5.215 billion increased $311 million or 6%. The increase was due to higher costs in nearly all line items reflecting higher operated capacity and traffic year over year, in addition to higher labour, maintenance and information technology expense. Lower fuel expense partially offset the increase.
• Operating income of $11 million, with an operating margin of 0.2%, improved $28 million.
• Adjusted EBITDA of $453 million, with an adjusted EBITDA margin* of 8.7%, improved $42 million.
• Net loss of $81 million and diluted loss per share of $0.22 compared to net income of $4 million and diluted loss per share of $0.03.
• Adjusted net loss of $96 million and adjusted loss per diluted share of $0.27 compared to adjusted net loss of $188 million and adjusted loss per diluted share of $0.53.
• Adjusted CASM of 14.76 cents compared to 14.52 cents, an increase of 1.6% mainly driven by labour, maintenance and information technology expenses.
• Net cash flows from operating activities of $1.592 billion increased $155 million, with continued strong growth in advance ticket sales consistent with seasonal trends.
• Free cash flow* of $1.056 billion increased $69 million with continued strong growth in advance ticket sales consistent with seasonal trends.
• Net debt-to-adjusted EBITDA ratio was 0.9 as at March 31, 2024, compared to 1.1 as at December 31, 2023. The improvement was driven by strong free cash flow in the first quarter of 2024.

Fleet update

Air Canada is in the process of arranging lease agreements for some additional Boeing 737 MAX 8 aircraft that would be scheduled for delivery in 2024 and enter service in 2025, upon completion of reconfiguration.

Outlook

For the second quarter of 2024, Air Canada plans to increase its ASM capacity by about 7% from the same quarter in 2023.

Air Canada is reiterating the full year 2024 guidance provided in its news release dated February 16, 2024, as described below.

Major Assumptions

Air Canada made assumptions in preparing its guidance - including moderate Canadian GDP growth for 2024. As part of its assumptions, Air Canada now assumes that the Canadian dollar will trade, on average, at C$1.35 per U.S. dollar for the full year 2024 and that the price of jet fuel will average C$1.03 per litre for the full year 2024.

First Quarter 2024 Conference Call

Air Canada will host its quarterly analysts' call today, Thursday, May 2, 2024, at 8:00 a.m. ET. Michael Rousseau, Air Canada President and Chief Executive Officer, John Di Bert, Executive Vice President and Chief Financial Officer, and Mark Galardo, Executive Vice President, Revenue and Network Planning, will present the results and be available for analysts' questions. Immediately following the analysts' Q&A session, Mr. Di Bert and Pierre Houle, Vice President and Treasurer, will be available to answer questions from term loan B lenders and holders of Air Canada bonds.

Media and the public may access this call on a listen-only basis. Details are as follows:

Webcast: available on-line (Note: This is a listen-in audio webcast.)

By telephone: (647) 932-3411 or 1-800-715-9871 (toll-free), Conference ID 1413217 Please allow 10 minutes to be connected to the conference call.

About Air Canada

Air Canada is Canada's largest airline, the country's flag carrier and a founding member of Star Alliance, the world's most comprehensive air transportation network. Air Canada provides scheduled service directly to more than 180 airports in Canada, the United States and Internationally on six continents. It holds a Four-Star ranking from Skytrax. Air Canada's Aeroplan program is Canada's premier travel loyalty program, where members can earn or redeem points on the world's largest airline partner network of 45 airlines, plus through an extensive range of merchandise, hotel and car rental partners. Through Air Canada Vacations, it offers more travel choices than any other Canadian tour operator to hundreds of destinations worldwide, with a wide selection of hotels, flights, cruises, day tours, and car rentals. Its freight division, Air Canada Cargo, provides air freight lift and connectivity to hundreds of destinations across six continents using Air Canada's passenger and freighter aircraft. Air Canada aims to achieve an ambitious net zero emissions goal from all global operations by 2050. Air Canada shares are publicly traded on the TSX in Canada and the OTCQX in the US.

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