Annual EBITDA margin of 19 to 22 percent
Annual ROIC of 16 to 20 percent
Cumulative free cash flow of $4.0 billion to $4.5 billion
Leverage ratio of no more than 1.2 by the end of 2019

Air Canada is updating its key financial targets in conjunction with its 2019 Investor Day to be held today in Toronto from 09:00 to 12:30 ET.

From 2019 until 2021, Air Canada (ACDVF) is targeting an annual EBITDA(1) margin (earnings before interest, taxes, depreciation, amortization and impairment, as a percentage of operating revenue) of 19-to-22 percent and an annual return on invested capital (ROIC)(1) of 16-to-20 percent. Air Canada is also projecting cumulative free cash flow(1) of $4.0-to-$4.5 billion over the same period, including projected free cash flow of between $400 million and $600 million in 2019, and a leverage ratio(1) of no more than 1.2 (measured by net debt over EBITDA) by the end of 2019.

"Since Air Canada held its first Investor Day in 2013, we have repeatedly met or exceeded virtually all of our key financial targets, demonstrating management's ability to consistently deliver on our commitments and successfully execute on our business plans. Moreover, we keep setting ambitious targets for Air Canada to drive continuous improvement and further increase shareholder value. Our share price has appreciated over 1,300 percent over the last five years and over 4,000 percent since April 1, 2009 when we embarked on our transformation strategy to position Air Canada for long-term, sustainable profitability. In addition, we are now on course for our objective of achieving an investment grade credit rating," said Calin Rovinescu, President and Chief Executive of Air Canada.

At Air Canada's 2019 Investor Day, Mr. Rovinescu will provide an update on the airline's strategy and Michael Rousseau, Deputy Chief Executive Officer and Chief Financial Officer, will discuss the updated financial targets. In addition, select members of the Air Canada executive team will detail recent and upcoming initiatives, as follows:

Arielle Meloul-Wechsler, Senior Vice President, People, Culture and Communications, will discuss Air Canada's competitive culture.
Craig Landry, Executive Vice President, Operations, will detail the airline's operational priorities and cost transformation initiatives identified in the operations.
Lucie Guillemette, Executive Vice President and Chief Commercial Officer, will explore Air Canada's revenue-generating initiatives and how the airline will continue to win in the marketplace.
Mark Galardo, Vice President, Network Planning, will discuss the evolution of the network and fleet and outline the growth opportunities ahead.
Catherine Dyer, Senior Vice President and Chief Information Officer, will provide insight into the benefits of the new reservation platform and other technology investments.
Mark Nasr, Vice President, Loyalty and eCommerce, will discuss Air Canada's loyalty and digital strategy and related analytics opportunities.
All financial target information provided is based on the accounting standards applicable to Air Canada as at January 1, 2019, including the impact of IFRS 16 Leases. In addition, the financial targets include the impact of Aeroplan since its acquisition date of January 10, 2019. The cumulative free cash flow target excludes the net proceeds on the closing of the Aeroplan transaction.

The outlook provided in this news release constitutes forward-looking statements within the meaning of applicable securities laws, is based on a number of assumptions, including those discussed below, and is subject to a number of risks and uncertainties. Please see the section below entitled "Caution Regarding Forward-Looking Information".

Attendance at Air Canada's 2019 Investor Day is by invitation only. A link to the live audio webcast of the event and accompanying presentation slides will be available on Air Canada's website at prior to the event.

Major Assumptions

Assumptions were made by Air Canada in preparing and making forward-looking statements.

As part of its assumptions, during the 2019-to-2021 period, Air Canada assumes relatively modest Canadian GDP growth. Air Canada also assumes that the Canadian dollar will trade, on average, at C$1.32 per U.S. dollar in 2019, C$1.29 per U.S. dollar in 2020 and C$1.28 per U.S. dollar in 2021 and that the price of jet fuel will average 82 CAD cents per litre in 2019, 84 CAD cents per litre in 2020 and 85 CAD cents per litre in 2021.