Investing.com — Shares of Air Canada (TSX:AC) fell 8% following the release of its 2025 outlook and presentation of the company’s long-term goals. Despite reiterating its previous predictions, investors appear unimpressed with the airline’s projections for the next few years.
The carrier’s presentation outlined a strategy to achieve annual EBITDA growth of approximately 10% through 2028, leveraging increased capacity, network scale and fleet cost optimization.
Air Canada expects to realize cost efficiencies of 15-20% through a modernized fleet and is targeting a 3% annual improvement in labor productivity, although these improvements are expected to materialize more significantly towards the end of the forecast period. These measures are part of a broader plan to offset rising inflationary pressures.
While it anticipates significant capital expenditures totaling C$18 billion over the 2024-2028 period, Air Canada is targeting cumulative free cash flow (FCF) of approximately C$4-5 billion.
The airline also intends to maintain a leverage ratio below 2x, with liquidity targets set between C$6 billion and C$7 billion, including the revolving credit facility (RCF).
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