Air Canada eyes strong revenue growth by 2028, banks on robust leisure travel demand

Air Canada said on Tuesday it was targeting a 36% jump in its 2028 operating revenue from the current year, riding a wave of strong demand for leisure travel across domestic and international routes.

Airlines worldwide are optimistic about the future of air travel, driven by a post-pandemic surge as travelers shift their priorities from goods to experiences.

Air Canada also forecast its 2025 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of C$3.4 billion ($2.38 billion) to C$3.8 billion, compared with analysts' estimates of C$3.63 billion according to data compiled by LSEG.

"Our strategy, which builds on and leverages the unique strengths developed over the last decade, is to rise even higher with consistent margin expansion and structural cash generation while maintaining a strong balance sheet and a responsible risk profile," CEO Michael Rousseau said.

It also plans to expand its network. Earlier this year, the Montreal-based carrier revealed plans to increase flights to China and to add capacity to other Asia-Pacific routes.

The Canadian flag carrier is targeting an operating revenue of about C$30 billion in 2028, with an adjusted core profit margin of 17% or greater.

It expects to report an operating revenue of approximately C$22 billion this year with a core profit margin of about 16%.

"We believe we are very well positioned to execute our long-term plans," Rousseau added.

The airline is expected to provide more details into its future plans at its investor day scheduled for Tuesday.

($1 = 1.4277 Canadian dollars)