Air Canada (AC) JPMorgan Industrials Conference 2026 summary

Demand and pricing trends

• Strong demand resilience observed, with price increases implemented to offset higher fuel costs; about half of Q2 fuel volume is hedged, and Q1 is protected by inventory and hedging.

• International demand remains robust, with fuel surcharges in place across Europe and some Asian markets, subject to government approval.

• Transborder leisure travel to the U.S. declined by 10-15% last year but has stabilized; capacity was redeployed to other markets.

• No significant return to U.S. sun markets; stability in non-U.S. sun destinations persists.

• Corporate travel is up 10% year-over-year, with transatlantic corporate demand up 30%; international and transborder corporate segments are strong.

Network, fleet, and strategic initiatives

• Fleet strategy focuses on international growth, leveraging long-range aircraft and A220s for North America; new aircraft are margin-enhancing with high ROI.

• Sixth freedom traffic is supported by partnerships, notably with United Airlines, and expanded U.S. market presence with A220s.

• Capacity to LATAM has increased, with positive flows from Europe through Canada into South America.

• Premium product revenue is around 28-29% and expected to grow, driven by corporate and premium leisure demand and new aircraft with more premium seating.

• No structural barriers prevent premium revenue from reaching higher levels, aside from market depth.

Loyalty program and economics

• Loyalty program membership grew from 4 million to 10 million since 2019, with expanded partnerships and improved EBITDA.

• Interchange rates are lower in Canada than the U.S., but the program remains a key lever for future growth.

• Contracts with credit card partners are due in about five years; negotiations will begin in the next couple of years.

• Loyalty program is accretive to margins and cash flow, with about 10% of members in the U.S.

• Embedding the loyalty program within the airline drives value beyond what is reflected in valuations.