By Adriano Marchese

Shares in Air Canada fell Tuesday morning after the Canadian airline released its targets for 2024 through the end of the decade.

Shares fell 6.3% to 23.34 Canadian dollars ($16.39) in recent trading. Shares are up almost 25% year to date.

Air Canada reaffirmed its full year guidance for 2024 and expects operating revenue of C$22 billion, with a 5% growth in capacity, measured in available seat miles, over the 99.01 billion logged in 2023. It expects adjusted cost per available seat miles to see 2% growth from the 13.49 Canadian cents last year.

Looking beyond, the company has set long-term targets for 2028 and aspirations for 2030. The company expects operating revenues to be about C$30 billion in 2028, and then to grow beyond that figure in 2030.

While there aren't any consensus figures for Air Canada into those years, Scotiabank analyst Konark Gupta said in a report that the market could be slightly disappointed by relatively modest targets for 2028 and 2030, especially as they compare with 2024.

There are also other headwinds that could weigh on the company, he thinks. "While USD-CAD has become more unfavourable compared with underlying street assumptions, there also appears to be some structural or sticky cost inflation and capex requirements over the long term," Gupta said.

Adjusted earnings before interest, taxes, depreciation and amortization margin is expected to be 17% or more in 2028 before rising between 18% and 20% in 2030.

Air Canada cautioned, however, that these 2028 and 2030 targets aren't considered guidance or outlook, but "rather are provided for the purpose of assisting in measuring progress towards Air Canada's objective."

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

December 17, 2024 10:38 ET (15:38 GMT)

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