[Foreign language] Bonjour à tous. Bienvenue. Je suis Christophe Hennebelle, vice-président des communications de l'entreprise. Before we begin, a few housekeeping notes. Today's meeting takes place at Telus Garden, a space designed to support collaboration, sustainability and community. The building features energy efficient systems, fresh air ventilation and thoughtful designed work and gathering spaces. In the event of an emergency, please follow instructions from building personnel and proceed calmly to the nearest exit or designated assembly area.
Fier transporteur national, Air Canada relie le Canada et le monde depuis 1937. Au fil des décennies, nous nous élevons toujours plus haut, car nous croyons au Canada, d'un océan à l'autre, à l'autre.
40,000 strong. We're ambitious, proud and ready for what comes next. Introducing the Air Canada Airbus A350-1000. Engineered to go further, carry more and fly efficiently.
C'est la prochaine génération de vols long-courriers pour relier de nouveaux marchés et étendre la portée du Canada à travers le monde. Pour nos clients, nos collectivités et notre pays. C'est plus qu'un simple appareil, c'est notre engagement tourné vers l'avenir. [/Foreign language]
To sharing the best of Canada at home and around the world. The Air Canada Airbus A350-1000.
[Foreign language]
Good morning, shareholders and guests.
[Foreign language]
I begin by reaffirming Air Canada's commitment to indigenous inclusion and reconciliation. Our network crosses many treaty lands as well as unceded and traditional territories of indigenous nations and governments on Turtle Island that is North America. In that spirit, we recognize the ancestral and traditional lands of the indigenous people we fly over.
[Foreign language]
Au nom du conseil d'administration, je tiens à exprimer nos plus sincères condoléances à la famille, aux proches et aux collègues des deux pilotes de Jazz qui ont tragiquement perdu la vie.
On behalf of the board of directors, I want to express our deepest condolences to the family, friends and colleagues of the two Jazz pilots who tragically lost their lives. I also want to express our sincerest sympathies to the passengers, crew members and others who were injured or otherwise affected, as well as our appreciation to everyone in our company, industry or otherwise, who helped at the time and in the days that followed.
Cette tragédie a touché l'ensemble de la famille d'Air Canada. Je vous invite à vous lever si vous le pouvez pour observer un moment de silence.
This tragedy has been felt by all in our Air Canada family.
If you're able to do so, I invite you to stand and observe a moment of silence. Merci. Thank you. We're pleased for the first time since 2013 to be back here in Vancouver, home to about 7,000 employees and one of our primary hubs. We want to thank Telus for having graciously opened Telus Garden for us to host our meeting in this remarkable space, and are grateful to the Telus team who have supported us in doing so. Today, our meeting includes shareholders from across Canada and around the world. We're glad you're joining us wherever you may be. Thank you for taking part in our annual dialogue. Nous croyons au dialogue avec nos actionnaires, y compris à cette assemblée. [Foreign language]
J'ai le plaisir de confirmer que plus de 35% de nos actions sont représentées ici, ce qui dépasse le seuil de notre quorum. Accordingly, with notice of the meeting having been duly given and quorum being present, I call our 2026 annual shareholder meeting to order. I've adopted an agenda to govern the order of business and general rules of conduct for the meeting, which you can find in the document tab of your webcast screen. Voting is now open for all items to be voted on today and will close shortly after the last item has been discussed. This means we'll not pause the meeting to collect ballots as we progress through our agenda together. This will allow everyone more time to vote if they had not already done so.
I'm joined on the podium on my immediate left by Marc Barbeau, our Executive Vice President, Chief Legal Officer, and Corporate Secretary, who will act as the secretary of this meeting. Also joined by Michael Rousseau, our President and Chief Executive Officer, and on the far left, John Di Bert, our Executive Vice President and Chief Financial Officer.
[Foreign language] Sont aussi présents en personne ou en ligne les autres membres du conseil, des représentants de notre auditeur indépendant, PricewaterhouseCoopers, et plusieurs de nos dirigeants. [Foreign language] Avec mon mot d'ouverture, je demanderai à Marc de nous rappeler certaines mises en garde et comment participer à notre assemblée. Marc.
Merci, Monsieur le Président, et bonjour à tous nos actionnaires.
Thank you, Mr. Chair, and good morning in turn to all our shareholders.
Notre assemblée se déroulera en français et en anglais. Les participants peuvent y intervenir dans l'une ou l'autre de ces deux langues, et nos échanges font l'objet d'une interprétation simultanée. Si vous assistez à l'assemblée en ligne, vous pouvez choisir la chaîne de votre choix, y compris une chaîne en direct, si vous préférez cette option.
Since our comments or responses to the meeting today could contain forward-looking statements about our prospects, objectives and strategies, I refer you to the cautionary statements concerning forward-looking information found in our public record, which is available on aircanada.com or SEDAR+. The record also includes an explanation of the non-GAAP measures we sometimes use, as well as a reconciliation with the most directly comparable GAAP measure.
As we note in those filings, aircraft fuel prices continue to be subject to high volatility as a result of the ongoing conflict in the Middle East. [Foreign language] Les actionnaires inscrits et les fondés de pouvoir qui participent à l'assemblée en personne peuvent prendre la parole à l'aide du microphone placé dans l'allée. [Foreign language] Si vous le faites, veuillez donner votre nom et indiquer votre statut. [Foreign language] Vous pouvez également participer au moyen de l'onglet de messagerie sur votre écran de webdiffusion. [Foreign language] Nous vous prions de réserver vos interventions pour les sujets susceptibles d'intéresser l'ensemble des actionnaires plutôt que pour des commentaires plutôt personnels. [Foreign language] Monsieur le Président, je vous cède la parole pour la suite de l'assemblée.
Thank you, Marc. Merci, Marc. Following my opening remarks, we'll turn to the proposals in our information circular. Mike will share some remarks about our 2025 financial year, followed by a Q&A session. This year marks an important moment of transition for Air Canada and for our board. In March, we announced that our President and Chief Executive Officer, Mike Rousseau, will retire by the end of the third quarter of 2026. Mike has served Air Canada for nearly two decades, including as CEO or CFO, Deputy CEO and President and CEO, guiding the company through significant periods of challenge and transformation. Under his leadership, Air Canada strengthened its financial position, navigated the pandemic, advanced customer-centric initiatives, and captured opportunities such as the acquisition of Aeroplan and restoring the solvency of our pension plans.
On behalf of the board, I sincerely thank Michael Rousseau for his dedicated service and extraordinary contributions to Air Canada. The board is also grateful for his continued leadership and support as the board completes the process of selecting our new CEO. Succession planning has been a long-standing priority to the board. Consistent with this, and related specifically to CEO succession, we have a comprehensive internal executive development program that's been underway for over 2 years. Earlier this year, we complemented that program with an external global search. Our CEO role specification includes having proven airline experience, a track record of setting enterprise strategy, and for delivering results at scale. The board's performance criteria also include the ability to communicate to Canadians in both official languages. All these criteria are important and will not compromise on any of them.
Our selection process has progressed significantly, and we have a strong group of internal and external candidates. In order to preserve the integrity of our selection process, we will not provide further details until an official announcement is made. This year, we also marking the retirement of Mr. Gary A. Doer from the board of directors. Gary has brought strategic insight and meaningful perspective to the board since his nomination. On behalf of the board, I sincerely thank Gary for his dedicated service and contributions to Air Canada and its shareholders during his tenure as director. We appreciate the voting support every board member nominee received from shareholders in the run-up to today's meeting. Together, all our board nominees bring remarkable accumulated experience, expertise, and background, helping to advance Air Canada's priorities in a changing world.
Indeed, in 2025, Air Canada adapted to a changing environment and delivered solid financial results, capped by an exceptional fourth quarter despite significant headwinds. Throughout this unsettled period, the company made progress on its long-range plan and on capital allocation and other priorities we know our shareholders care about. Notably, since 2024, our over 64 million shares have been repurchased, returning more than CAD 1.5 billion to investors. We're pleased with Air Canada's strong start in 2026, including its delivery of record first quarter operating revenues. In 2026, our board and executive leadership will continue to work closely to execute on Air Canada's strategic plan, with safety first always remaining our overarching priority and customer centricity guiding our actions.
At the same time, we'll continue to act on sustainability and to remain committed to excellence, innovation, profitable and sustainable growth, and disciplined capital allocation. We're immensely proud of being Canada's flag carrier. We want to share the best of Canada at home and abroad, inclusive culture where everyone belongs and proudly promoting our official languages. We're proud of how our leadership team and our over 39,000 employees have stayed true to the long-standing values and priorities that have guided us through challenging times. In closing, I want to express our thanks as a board to all Air Canada's employees around the world for their professionalism, resilience, and unwavering commitment to safety and service. Our annual meeting has been streamlined to allow as much time as possible for our remarks and our Q&A session.
I also ask those of you planning to speak or raise a question to please keep your comments brief. A couple of minutes should be sufficient to make your point. Unless your questions or remarks relate to a specific item of business under consideration, I ask that you hold it until the question period.
Merci Monsieur le Président. Je réitère que le scrutin est maintenant ouvert pour tous les points à l'ordre du jour qui est soumis au vote aujourd'hui. Si vous avez déjà voté, aucune autre action n'est requise de votre part, à moins que vous souhaitiez modifier votre vote. Vous trouverez les directives à cet effet dans l'onglet Documents sur votre écran si vous participez à l'assemblée en ligne. À tout moment, si vous avez besoin d'aide, vous pouvez vous adresser à un préposé, si vous êtes sur place ou nous joindre par courriel comme il est indiqué dans l'onglet Documents sur votre écran. Nous vous remercions d'avoir confirmé votre statut de Canadien ou de non-Canadien. Ceci me permet de confirmer qu'aucun ajustement au droit de vote variable de nos actions ne sera nécessaire aujourd'hui. [/Foreign language]
Nous invitons les actionnaires à nous transmettre leurs questions à partir de l'onglet Messages sur leur écran. Nous prévoyons répondre aux questions pendant la période des questions indiquée à l'ordre du jour. Toutefois, si vous avez des questions ou des commentaires devant être traités avant la période de questions, veuillez nous le signaler clairement au préalable le plus rapidement possible. Dans tous les cas, il vous suffit de cliquer sur l'onglet Message sur votre écran.
Si vous êtes sur place, veuillez vous présenter au microphone qui se trouve dans la salle devant moi. Le vote en personne se fera par scrutin pour toutes les questions prévues à l'ordre du jour aujourd'hui. Un rapport provisoire officiel des scrutatrices sera compilé plus tard. Des représentantes de compagnies de TSX Trust sont ici avec nous aujourd'hui et ont accepté, à l'invitation de notre président d'assemblée, d'agir comme scrutatrice. Nous les en remercions. [/Foreign language]
Le point suivant à l'ordre du jour consiste à soumettre aux actionnaires les états financiers d'Air Canada pour 2025, ce qui a été fait. Nos états financiers ont été publiés en février 2026 et peuvent également être consultés dans l'onglet Documents sur votre écran. Monsieur le Président, à vous la parole. [/Foreign language]
[Foreign language] Marc. I don't see any question about this item on the agenda either for us or for our auditor, so we'll move to the next items on the agenda.
Merci. [Foreign language] Monsieur le Président, 5 propositions de la direction seront présentées aujourd'hui. [Foreign language] Toutes ces propositions sont décrites dans la circulaire de sollicitation de pré- procuration relative à notre assemblée. [Foreign language] En fonction des votes comptabilisés avant l'ouverture de notre assemblée et du nombre de votes qui pourraient autrement être inscrits en cours d'assemblée, nous savons que toutes les résolutions soumises au vote aujourd'hui seront approuvées par la majorité requise.
[Foreign language] Afin de simplifier le bon déroulement de notre assemblée, nous avons veillé à ce que chacune des propositions soumises aujourd'hui soit appuyée et soumise d'avance, selon le cas, par nos collègues d'Air Canada. [Foreign language] Nous les remercions de participer à l'assemblée ainsi. [Foreign language] Le premier point faisant l'objet d'un vote est l'élection des administrateurs, des administrateurs. [Foreign language] La candidature des 13 personnes suivantes a été dûment proposée et recommandée par le conseil d'administration.
[Foreign language] Amee Chande, Christie J.B. Clark, Rob Fyfe, Michael M. Green, Jean Marc Huot, Eric La Flèche, Claudette McGowan, Rachel Notley, Madeleine Paquin, Michael Rousseau, Vagn Sørensen, Kathleen Taylor et Annette Verschuren. Aucune autre candidature n'a été soumise en vue de l'élection des administrateurs. Monsieur le Président, la parole vous revient. [/Foreign language]
Merci Marc. Seeing no questions or comments from our shareholders, I encourage you to vote by using the online platform or by filling your ballots as the case may be. We'll proceed with the remaining business of the meeting and the attendants will collect the ballots only once all votes are completed. Marc, would you move to the second item on the agenda?
Merci Monsieur le Président. Le conseil d'administration recommande également de voter en faveur de la nomination de notre auditeur PricewaterhouseCoopers jusqu'à la fin de la prochaine assemblée annuelle des actionnaires. Monsieur le Président, la parole vous revient à nouveau.
Seeing no questions or comments from our shareholders, I encourage you to vote by using the voting tab on your webcast screen or by filling your ballot as the case may be. Again, for those of you here in person, please keep your ballot until all votes are completed. Marc, would you move to the third item on the agenda, please.
Merci Monsieur le Président. Le conseil d'administration recommande également de voter en faveur de la prochaine proposition visant à ce qu'il soit résolu que les actionnaires acceptent, à titre consultatif et sans diminuer le rôle et les responsabilités du conseil, l'approche en matière de rémunération de la haute direction présentée dans notre circulaire de sollicitation de procuration de la direction en vue de l'assemblée d'aujourd'hui. Monsieur le Président, vous avez de nouveau la parole.
Thank you. Although this vote is advisory and non-binding, the board takes it into account and consults shareholders to understand their views and ensure our executive compensation policies support Air Canada's long term goals and shareholder value creation. To this end, we met with shareholders who in 2025 represented most of the shares voted against our approach to executive compensation and have benefited from their insights. We continue this practice this year. Seeing no questions or comments, I encourage you to vote by using the voting tab on your webcast screen or by filling your ballot as the case may be. Again, for those of you here in person, please keep your ballot until all of the votes are completed. Marc, [Foreign language] pouvez-vous passer au quatrième point à l'ordre du jour ?
Merci Monsieur le Président. Le prochain point à l'ordre du jour porte sur l'adoption d'une résolution ordinaire approuvant une augmentation du nombre d'actions réservées et autorisées aux fins d'émission dans le cadre du régime d'intéressement à long terme d'Air Canada. Monsieur le Président, je vous cède la parole. [/Foreign language]
[Foreign language] The board of directors has determined it would be appropriate to increase the share reserve to provide an effective means to utilize incentive awards in future years. We're proposing to do so by replenishing the reserve by 6 million shares as described in our management proxy circular. Seeing no questions or comments, I encourage you to vote by using your webcast screen voting tab or by filling your ballot as the case may be. Marc, [Foreign language]
Merci Monsieur le Président. Le prochain point à l'ordre du jour porte sur l'adoption d'une résolution ordinaire ratifiant le régime de droit des actionnaires d'Air Canada, adopté par le conseil d'administration le 21 mars 2023. Le régime de droit demeurera en vigueur jusqu'en 2029 à condition que sa ratification soit approuvée à la majorité des voix exprimées par les actionnaires à la présente assemblée. Monsieur le Président, la parole est à vous.
Merci. Marc, seeing no questions or comments, I encourage you to vote by using the webcast screen voting tab or by filling your ballot as the case may be. Marc, [Foreign language].
Merci Monsieur le Président. Comme il est décrit dans notre circulaire, Air Canada a reçu 2 propositions du Mouvement d'éducation et de défense des actionnaires, lesquelles figurent à son annexe B. À la suite de nos échanges avec le MÉDAC, notamment quant à notre intention d'organiser un vote consultatif sur la rémunération des dirigeants lors de cette assemblée et de fournir dans la circulaire des informations sur les résultats du vote en 2025, le MÉDAC a accepté de retirer l'une de ses 2 propositions qui ne fera pas l'objet d'un vote. Air Canada a accepté de reproduire la proposition retirée dans sa circulaire et de permettre au MÉDAC de s'exprimer sur sa teneur à l'Assemblée. Nous reviendrons plus tard sur la proposition retirée.
La proposition du MÉDAC intitulée Renforcement de la participation des actionnaires aux assemblées générales annuelles, en particulier celles des petits actionnaires, sera quant à elle soumise au vote. Je vous cède la parole, Monsieur le Président.
Merci Marc. J'invite maintenant le représentant du MÉDAC, Monsieur Willy Gagnon, à présenter cette proposition sur la participation des actionnaires qui figurent à titre de proposition numéro 1 à l'annexe B de notre circulaire de sollicitation de procuration. Monsieur Gagnon, vous avez la parole. [/Foreign language]
Bonjour monsieur le président. Laissez-moi une seconde, j'ai un problème de son. Est-ce que vous m'entendez clairement ?
Oui oui, nous vous entendons monsieur Gagnon. Ça va de votre côté ?
Très bien. Bon mon nom est Willie Gagnon et puis comme à l'habitude, je représente le Mouvement d'éducation et de défense des actionnaires qui est actionnaire de la société depuis de nombreuses années. Non seulement ça, mais le MÉDAC existe depuis plus de 30 ans cette année. Bref, nous avons, comme vous l'avez dit, envoyé 2 propositions. Il y en a 1 seule qui est soumise au vote, une proposition visant le renforcement de la participation des actionnaires aux assemblées générales annuelles. La raison pour laquelle on a envoyé cette proposition-là à toutes les sociétés dont on est actionnaire cette année, c'est le fait que l'an dernier, on a assisté à un défaut de quorum dans une société ouverte, nommément Transat, que Air Canada a déjà songé acheter. Ça nous a inquiété sur le taux de participation des actionnaires aux assemblées, notamment les actionnaires individuels.
On peut constater dans un graphique qui accompagne notre proposition, un graphique qui a été produit par Broadridge, que le taux de participation des actionnaires individuels tend à diminuer contrairement au taux de participation des actionnaires institutionnels. Ça nous inquiète profondément. On aurait souhaité que la société mette en place différentes mesures. La plupart des mesures qu'on a demandées sont déjà en place, notamment les mesures un, deux et trois, la plupart de ces mesures-là. Maintenant, la mesure quatre visait à ce qu'un tableau semblable à celui qui accompagne notre proposition soit divulgué par la société. Un tableau dans lequel il serait possible de constater en un seul coup d'œil si le taux de participation des actionnaires monte ou descend. La société a refusé de publier un tel tableau. C'est un tableau qui est très difficile à produire pour un actionnaire individuel. [/Foreign language]
Vous comprenez que l'information qui figurerait dans un tel tableau, elle est par ailleurs disponible, mais mettre tout ça ensemble, c'est très compliqué pour un actionnaire individuel alors qu'il serait simple pour la société de publier un tableau comme celui-là. Si tant était que la société avait accepté de publier ce tableau, on ne serait pas allé au vote sur cette proposition-là. On va au vote et indépendamment des résultats, on va continuer d'espérer que la société publie un tel tableau. Ça ne coûterait pas très cher de le faire et puis ça donnerait une information capitale aux actionnaires pour constater s'ils doivent faire un effort supplémentaire pour maintenir le taux de participation à l'assemblée. On apprend aujourd'hui que 35% des actionnaires ou des actions sont représentées aujourd'hui et que ça satisfait au quorum. Quel est le quorum ?[/Foreign language]
C'est le genre d'information qu'on aimerait pouvoir lire dans la circulaire. On invite évidemment l'ensemble des actionnaires à appuyer cette proposition. Pour ce qui est de l'autre proposition qui ne va pas au vote, la raison pour laquelle on envoie, c'est que quant au vote consultatif de l'année précédente, on n'obtient pas un certain seuil. On souhaite que les sociétés nous expliquent la raison pour laquelle c'est comme ça. On s'attend normalement à ce que le vote consultatif sur la rémunération dans une entreprise, ben, soit très largement appuyé. Quand c'est en deçà d'un certain seuil, on souhaiterait que les sociétés nous donnent de l'information de manière habituelle et courante à chaque année. Étant donné que Air Canada a accepté de nous donner cette information-là cette année, on accepte de ne pas aller au vote.
[Foreign language] On souhaiterait ne pas avoir à vous envoyer une proposition comme celle-là pour que vous le fassiez à chaque fois. Voilà la raison pour laquelle on a accepté, les raisons pour lesquelles on a accepté de ne pas aller au vote sur cette question-là. Monsieur le président, merci du temps que vous m'avez accordé. Plaisir. [/Foreign language]
[Foreign language]Merci, Monsieur Gagnon. Merci pour votre engagement. Augmenter la participation de nos actionnaires est un objectif important pour nous. Nous continuerons de poursuivre cet objectif. Toutefois, pour les motifs qui sont exposés dans notre circulaire de sollicitation de procuration, le conseil a recommandé à actionnaires de voter contre la proposition numéro 1.[/Foreign language] Seeing no further questions or comments, I encourage you to vote in respect of shareholder proposal number 1 by using the webcast screen voting tab or by filling your ballot as the case may be. Given that this proposal is the last voting item on our agenda, I also encourage you to cast your votes now on this or any other prior proposal as we prepare to close the ballots shortly.
For those of you who are here in person, I now ask that when your ballot is complete, you please hand it to the nearest attendant. Thank you. Before I invite Michael Rousseau to share his annual remarks, I remind shareholders and proxy holders that they may submit their questions or comments to us at any time before the end of the question period. For those attending the meeting online, if they've not done so, they must vote or change their votes within the next minute since the voting function will be deactivated shortly, putting an end to voting on the items on the agenda. For those attending the meeting in person, are there any more ballots to be collected? Yeah. Yeah. Thanks. I believe everyone has now had time to complete and return their ballots.
I will now ask the scrutineers to tabulate all the ballots and report back. We'll now pause the formal proceedings of our meeting to allow our CEO, Michael Rousseau, to share his annual remarks. Michael.
Well, good morning. Bonjour. Thank you for taking time to be with us today for Air Canada's 2026 annual general meeting. I'm very pleased to be joined in the room by some members of our senior executive team. For those of you attending in person, I encourage you to say hello to our executives. They love talking about all the great things Air Canada is doing. We, as always, are interested also to hear what's on your mind and your suggestions for ways that we can improve. Before I begin, I would like to acknowledge the tragic incident involving Air Canada Express Flight AC8646 at LaGuardia Airport in March. I visited the scene the day of the accident. It was a humbling and powerful illustration of the importance of safety in what we do every day.
On behalf of everyone at Air Canada, I extend condolences to the family and friends of crew lost in the accident. Best wishes for the recovery of those injured and our deep regard for all involved. I can assure you that we will learn from what we can from this incident and apply any lessons to making travel even safer. Air Canada delivered a strong performance in 2025. The results show the effectiveness of our business plan and the strength of our business model we have built since the end of the pandemic. In 2025, we generated record operating revenue of nearly CAD 22.4 billion, an increase of CAD 117 million from 2024. Of particular note, premium revenues increased 2% year-over-year, outpacing the economy cabin by 3 points and representing about 30% of our total passenger revenues.
We also saw increased contributions from all segments of the business, including Aeroplan, Air Canada Cargo, and Air Canada Vacations. Adjusted EBITDA totaled CAD 3.1 billion due to the very strong demand in the last two months of the year. We delivered CAD 747 million in Free Cash Flow, and we ended the year with total liquidity of CAD 7.5 billion for a net leverage of 1.7 times. Clearly, our results would have been much stronger except for the labor disruption in the third quarter. However, we quickly rebounded with a very strong record fourth quarter to end the year. Yesterday, we reported another record quarter to begin this year. Fourth quarter revenues reached CAD 5.8 billion, up 7% year-over-year. These were driven by industry-leading passenger unit revenue performance and strong premium demand.
Our Q4 Adjusted EBITDA of CAD 867 million in the quarter was 25% higher than the prior year, a record for our company for Q4. We also just announced a record Q1 2026 EBITDA performance. In the quarter, our revenue increased 11% versus Q1 of 2025. Our Adjusted EBITDA in the first three months increased more than 60% and Free Cash Flow almost doubled to CAD 1.6 billion. I believe two consecutive record quarters reflect the underlying strength of our plan and business model, and all stakeholders should be extremely excited as we move into the growth part of our strategic plan. Throughout 2025, we showed financial discipline, keeping a high conversion of, from earnings to the operating cash flow.
This enabled us to invest confidently in our future, deploying CAD 2.9 billion in capital investments expected to generate incremental returns going forward. Another outcome of our excellent performance was during the year we returned more than CAD 850 million to shareholders through share repurchases. We know this is especially important to you. We will continue to search for ways to create and return value to investors. An underlying factor critical to our success is running an efficient airline. Operationally, 2025 was another year of improvement that showed the dedication and professionalism of all our teams. Our focus was on all aspects of operational improvement, led by our on-time performance and Net Promoter Score to strengthen the overall dependability of our schedule and our premium brand positioning.
In 2025, we operated more than 370,000 flights, carried over 45 million customers, and achieved an average Load Factor close to 85%. We finished 2025 with an average arrivals of 14 or on-time performance of 73%. This is a 2-point improvement from 2024 and a 10-point improvement from 2023. Our Net Promoter Score for the year was above our target and up a healthy 7 points from the prior year. I was extremely proud of our employees when our customers recognized our hard work. In 2025, Air Canada was voted by customers the best airline in North America at the Skytrax World Airline Awards at the Paris Air Show. We won in 9 categories of these at these awards, which are globally recognized as the industry benchmark. Skytrax also ranked Air Canada as the only North American carrier among its global top 20 airlines.
We were further recognized at APEX, the Passenger Experience Awards, for the sixth consecutive year with a passenger-rated five-star global airline award. I thank all our employees for their hard work and their dedication. Another indicator of our success with customers is the growth of our Aeroplan loyalty program. Aeroplan passed the 10 million member milestone in 2025. It has now more than doubled its membership since the program relaunched. Fueled by a younger, more engaged demographic, Aeroplan is attracting members and partners not normally associated with traditional airline loyalty programs. Aeroplan is a significant competitive advantage and an indicator that customers plan to continue booking with us far into the future. An important aspect of customer service is the aircraft we operate and invest in, as well as associated services we offer on board.
Fleet renewal is an ongoing project. We have plans to acquire 70 new aircraft with options to purchase another 40. This includes 35 aircraft in 2026 and 2 new aircraft types for our fleet. With the new aircraft, we are also introducing the next generation cabin interiors. Last month, we unveiled the new long-haul cabin design, our glowing hearted standard. It features new seats, upgraded IFE systems, and warm accents inspired by the textures and materials that invoke Canada's natural environment. We are especially excited about having the Airbus A321XLR join the fleet. Despite being a narrow body aircraft, its long-range capability will let it fly routes we normally have to operate with larger planes.
This gives us options for extending service to seasonal markets off-peak, and it will be effective in opening up new markets where we need to build traffic. Because it is capable of long transatlantic flights, we are equipping the XLR with lie-flat Air Canada Signature Suites. This is the first time we will offer lie-flat seats on a narrow-body aircraft, and which is certain to be popular with the important premium traveler segment of our market. In a further evolution of our fleet, we are also transitioning our 737 MAX fleet to Air Canada Rouge. By replacing the older Rouge fleet, we will elevate the Air Canada leisure travel experience. For example, we will introduce seat-back entertainment and fast free Wi-Fi for Aeroplan members.
It will improve the consistency and quality of the Air Canada Rouge product for the benefit of our leisure customers and the entire Air Canada brand. Finally, earlier this year, we announced our plans to acquire 8 Airbus A350-1000 wide-body aircraft to support our international network growth, with rights to purchase another 8. The first delivery of the state-of-the-art aircraft is expected in 2030. To further distinguish the customer journey, we are also working to improve the airport experience. This begins with a new approach to customer service that we have launched with our frontline employees called Care & Class, that encourages them to assist customers better on the spot, in the moment. Our program for this new approach won a well-deserved award last year at the Customer Centricity World Series Awards.
Coupled with this, we are deploying new processes and new technology to improve important parts of the customer journey, such as baggage tracking and delivery, aircraft boarding, and lounge access. In terms of lounges, I hope those of you in Vancouver have already experienced our new Air Canada Café, opened last month at Vancouver's domestic C concourse. This is our second Café at the airport, and it offers an expanded 84-seat premium space inspired by West Coast design and culinary culture. We also just opened a new 62-seat Air Canada Café in Montreal Trudeau's U.S. departure pier that showcases the city's iconic coffee culture and local flavors. These investments form part of Air Canada's program to modernize its global lounge network, with many more further openings and renovations planned for the future. Taken together, all these initiatives are converging to drive forward our New Frontiers strategic plan.
The plan clearly sets out Air Canada's objectives and outlines its ambitions through 2030. A distinctive element of New Frontiers will be the expansion of our network. As events of recent years have shown, our varied network and revenue sources play a critical role in delivering strong results despite shifting market conditions. This includes the earlier disruption to our Pacific flying due to the Russia overflight issue, events impacting the transborder market, and more recently, the situation in the Middle East. Our diverse fleet and network allows us to mitigate disruptions in particular markets by quickly reallocating capacity to other markets. Recognizing these advantages, we are building scale in our hubs and reinforcing our competitiveness of our global network. In 2025, we added 13 new destinations on four continents. This includes Vancouver.
In 2022, we began the only nonstop flights to Bangkok. They are becoming year-round this summer. We started our service to Manila. For this winter, we will operate the only nonstop flight linking North America to Sapporo in Japan from the city. These exciting route additions represent our commitment to Vancouver, our Pacific gateway. In support of this, we've also established a Rouge crew base at Vancouver, which will give travelers going to and from the city and BC additional leisure options. In a significant investment for our employees in the city, we will soon begin operating our expanded simulator training center. Back east, our hubs in Toronto and Montreal have the best geographical placement to connect Europe with Latin America.
In the last quarter of 2025, we bolstered our competitiveness to better capture the counter seasonal flows between those markets and grow our demand base outside Canada. Our strategy is also to diversify our Sixth Freedom revenues, which increased by 10% in 2025 versus 2024, to reach record levels. In Q1 of 2026, we further increased Sixth Freedom by 18% versus Q1 2025. In support of all this, we just started transborder flying from Billy Bishop Airport in downtown Toronto to major business centers in North America, reflecting our commitment to making business travel easier for our customers. For the summer, we will add several European routes to our network, and along with the Bangkok service from Vancouver, we introduce nonstop flights to China from Toronto.
For next winter, we've already announced the addition of Peru and Quito to our passenger network. Last month we announced new flights from Toronto and Montreal to Tenerife, the only nonstop service between North America and the Canary Islands. There are also several new sun destinations coming. More than just provide a geography lesson, New Frontiers is targeting approximately CAD 30 billion in revenue by 2028. Equally, if not important, more important, we intend to increase our Adjusted EBITDA margin and Free Cash Flow through the same period. Against this backdrop, 2026 will be an important year, managing several complex external factors, as well as taking delivery of the majority of our new aircraft in the back half of this year. We are confident our investments are setting the stage for improved performance and greater efficiencies in 2027 and beyond.
We are building for the long term, and I am convinced the decisions we're making today will continue to strengthen the airline for years to come. It has been a great privilege and honor for me to lead Air Canada. I thank our board members, both current and past, for their support, their guidance, and encouragement over the years. The success we have enjoyed since the pandemic is the result of a tremendous team effort. Our recent Q4 2025 and Q1 2026 record performances, and effectively dealing with a volatile fuel price and potential supply environment is just the latest example of how good this team is. I also wish to thank all of my colleagues at the airline.
One of the great rewards of working at Air Canada is the opportunity to meet and work with so many incredibly talented people at all the different positions here at Air Canada. I was just at the Awards of Excellence event last week, which recognizes our best employees as voted on by their peers and colleagues. Another group I wish to acknowledge is our shareholders. I have met with and heard from all of you over the years. I do believe that you'll be rewarded as we execute New Frontiers. Your decision to invest in our company is a very clear expression of your confidence in all of us at Air Canada, and I can assure you of our deep commitment to repay this trust. Finally, I want to thank our customers.
It is our objective and our entire focus to earn their loyalty every day by flying everyone in comfort and safety to their destination, wherever in the world that may be. Thank you. Merci.
Thank you, Mike. Merci. At this time, and having received a preliminary report from our scrutineers, I will ask Mark to share the results from the tabulation completed after all proposals were presented and voting closed.
Merci, Monsieur le Président. Selon le nombre de votes définitifs déjà produits et la tabulation préliminaire des scrutatrices, nous pouvons confirmer que les 13 candidats au poste d'administrateur ont été élus. Leur mandat prendra fin à la clôture de la prochaine assemblée annuelle des actionnaires ou jusqu'à ce qu'un successeur soit dûment élu ou nommé. Les actionnaires ont également approuvé la nomination de notre auditeur indépendant, PricewaterhouseCoopers, le vote consultatif sur l'approche du conseil en matière de rémunération de la haute direction, l'augmentation du nombre total d'actions réservées et autorisées aux fins d'émission dans le cadre du régime d'intéressement à long terme et la ratification du régime de droit des actionnaires d'Air Canada. Les actionnaires n'ont pas approuvé la proposition d'actionnaires ayant trait à la participation des actionnaires aux assemblées générales annuelles. Les résultats définitifs des votes seront déposés sur SEDAR+ après notre assemblée.
Monsieur le Président, je vous cède une fois de plus la parole.
Thank you, Mark, and thank you all to all our shareholders for their votes and continued support. I'm especially thrilled to officially welcome Rachel and Éric to our board. We look forward to the insights you'll bring as we continue to discuss Air Canada's future. [Foreign language] Bienvenue, Rachel et Éric. [Foreign language] Nous avons hâte de travailler avec vous. [Foreign language] Nous débuterons maintenant la période de questions et réponses de l'assemblée. We want to thank you for the questions that you submitted in advance of the meeting. We'll start by answering one of those. [Foreign language] J'invite donc les participants qui souhaitent poser une question à se rendre au microphone et à confirmer leur statut. [Foreign language] Si vous êtes en ligne, vous pouvez poser une question par l'intermédiaire de l'onglet Messages sur votre écran de webdiffusion.
To ensure that as many questions or comments as possible can be addressed, I would ask that questions remain concise, ideally not exceeding 2 minutes. Please limit yourself to 1 question or comment at a time, allowing others to take their turn. If your question has already been asked by someone else, I'd kindly ask that you refrain from repeating it. We ask that you reserve your comments and questions to topics that may be of interest to all shareholders rather than of a personal nature. Mark will now read the 1st question submitted in advance.
Thank you, Mr. Chair. The first question we received in advance reads as follows: Could you clarify how the board is weighing core leadership competencies such as safety, performance, strategic aptitude, and the ability to drive shareholder and employee value relative to language requirements in the CEO selection process? Given that the pool of candidates with top-tier aviation leadership experience may be limited, how do we balance the importance of bilingualism with the need to secure the strongest possible candidate to lead Air Canada effectively?
Thank you for the question. As I stated in my opening remarks, succession planning has been a long-standing priority of the board, and our CEO role specification includes having proven airline experience, a track record of setting enterprise strategy, and for delivering results at scale. The board's performance criteria also include the ability to communicate to Canadians in both official languages. All these criteria are important, and we'll not compromise on any of them. We will now take a question from the floor, if any. If not the case, Mark, can you please read the next question?
The next question we received in advance, it reads as follows: How do you explain the stagnant stock price compared to Delta or United? Air Canada's share price is drastically low. Given the high debt, cost pressures, and geopolitical issues, what measures are you taking to derive a healthy balance sheet reduction in costs which ultimately drives higher share price?
I'll take that question. First of all, thank you for the question. I think that, you know, hearing Mike, we should all have a lot of positive confidence in what's going forward and in terms of our plan at Air Canada. We've taken significant steps to improve the balance sheet over the last few years. We came out of the pandemic with 5 times leverage.
Over the last 2 to 3 years, we've been able to take that down to 1.4 times leverage. The balance sheet is very, very strong. Our liquidity actually and our leverage are peer benchmarks in the industry. The strength of that balance sheet is allowing us to make very important investments in the future. I think Mike outlined the New Frontiers plan. We also did speak about it at our most recent investor day in December 2024. The plan that we put forward creates significant value for shareholders. It allows for margins to expand and creates sustainable cash flows for the very long term. We continue to take very important steps in improving our capital allocation. Beyond the investments in the airline, we've decreased debt, as I said.
We've also bought back over CAD 1.5 billion in stock in the last 15 months, and that has been to the benefit of shareholders, and will also allow them to participate in future profitability and growth as the airline continues its plan. Finally, we did announce yesterday that we do have an August 2026 maturity of $1.2 billion US, and with the strength of our balance sheet and liquidity, we'll be able to take that liquidity out and effectively extinguish the debt. I do have a lot of great confidence in the future of Air Canada, and we're confident that it will create a lot of value for shareholders.
Thank you, John. We'll now take a question from the floor, if any. If not the case, Mark, can you please read the next question?
Thank you, Mr. Chair.
Thank you, Mark. I'd ask you to answer that.
Uh,
Merci, Mark. We'll now take a question from the floor. Please.
Thank you. My name is Rod Holm. I am an independent beneficial shareholder. I have attended many of these meetings in the past, and my impetus for attending this meeting was to be able to express my thanks to Michael Rousseau for his leadership over many years, as I mentioned to him earlier that I met him at one of his first meetings.
Mm-hmm.
I was so worried about how the tragedy in New York was handled. I wanted to illustrate that by a very close relative who had worked at Air Canada and had apparently been keeping in touch with many of his colleagues, said that their network lit up. It was such a tragedy because in all the years that they had worked together, nothing like that had happened. When you mentioned, when we asked for a moment of silence, all the other people who had been affected, it's probably a lot more than most people would ever deem to realize, given the number of people who have worked with the airline. Thank you.
Thank you, Mr. Holm, for these remarks. Really great remarks and much appreciated. Thank you so much. Are there any other questions from the floor, please?
Good morning. Paul Foody, independent shareholder. I'm wondering with ICANN opening up the second application window yesterday, does Air Canada have any intention of applying for its own new gTLD or any others?
Sorry, could you repeat the question?
Yeah, ICANN, the people who run, the internet, yesterday they opened up the second application window for new top level domains.
Okay.
I'm wondering, will Air Canada be applying for its, TLD?
Okay. Well, thank you.
The quick answer is no, but, you know, I'll introduce you to Mark Nasr and to Craig Landry. Craig oversees technology for the company, and Mark oversees operations, and they can provide some more details to you when the meeting's over.
Well, might I suggest you speak to PwC about it.
Yeah, yeah.
They registered theirs back in 2012.
Perfect. Thank you very much for that.
Cheers. Thank you.
Thank you.
Are there any other questions from the floor?
We do have a question from.
If not the case, there is another question that came in. Can you please read the last or the next question, Mark?
Thank you, Mr. Chair. The third question we received in advance was, for labor relations, have you concluded the arbitration process with CUPE? If so, what was the result?
I'll ask Mike to take that question. Please, Mike.
Thank you for the question. Thank you, Vagn Sørensen. The quick answer is we do have a new four-year agreement with CUPE. To provide a little more detail, we signed a tentative agreement on August 19th, 2025. One item went to arbitration around wages. The federal arbitrator issued their decision on February 17th, 2026, and the arbitrator upheld that wages as agreed to in the tentative agreement would continue throughout the four-year contract, with the exception that wage rates for Rouge flight attendants would be increased by 1% in the first year. Again, we do have a solid four-year agreement with our flight attendants going forward.
Mike, are there any other questions?
I don't see any.
Not coming in. Are there any other questions from the floor? No. Seeing no further questions in the meeting room online, the discussion of matters for shareholder consideration is completed as we reconvene the formal part of our meeting. Mark, are there any other questions that have been raised or that have not yet been addressed?
No, Mr. Chairman, there are no other questions at this time.
In conclusion, I want to thank you all for joining today's meeting and for your questions. We are pleased to continue to engage with you over the coming year. I now declare that our 2026 annual meeting of shareholders has concluded.