Air Canada (AC) Earnings Call Transcript & Summary

[Interpreted] Good morning, shareholders and guests. My name is Vagn Sorensen. I'm the Chairman of the Board of Directors of Air Canada, and I will preside our meeting this morning, which is held in person for the first time since 2019. I would like to begin by reaffirming our commitment to indigenous inclusion. Air Canada's network crosses many treaty lands as well as unseated and traditional territories of indigenous nations, tribes and governments on Turtle Island, in other words, North America. In doing so, Air Canada recognizes the ancestral and traditional lands of the indigenous peoples we fly over. Notice of the meeting having been duly given and quorum being present, I call our 2025 Annual Shareholder Meeting to order. I refer you to the agenda I've adopted to govern the order of business and to the general rules of conduct for the meeting. You'll find these and other relevant materials in the documents tab of your webcast screen and on the investor relations page on aircanada.com. Voting is now open for all items on the agenda to be voted on today and will be closed shortly after the last item on the agenda that will be submitted to a vote. Today, our meeting includes shareholders from across Canada and around the world. We're glad you're joining us wherever you may be. [Interpreted] Thank you for your attendance here this morning and for taking part in our annual dialogue, which goes beyond the formalities. I'm pleased for us to return here in Toronto, home to nearly 15,000 employees as well as one of our primary hubs of operations. I'm joined on the podium on my immediate right by Marc Barbeau, our Vice -- Executive Vice President, Chief Legal Officer and Corporate Secretary, who will act as the Secretary of this meeting; and John Di Bert, our Executive Vice President and Chief Financial Officer. Michael Rousseau, our President and Chief Executive Officer, is currently recovering from a medical procedure that has required him to curtail his public activities over the coming weeks. He's in good health and remains fully engaged with the operations of the company. [Interpreted] The other Board nominees are present in person or online, as are the representatives of our independent auditor, PricewaterhouseCoopers and many of our executive. Before my opening remarks, I would like to ask Marc to remind us of some of the caveats about the meeting and how to participate in our meeting. Marc?

[Interpreted] Thank you, Mr. Chairman, and good morning to all our shareholders. Since our comments and responses to the meeting today could contain forward-looking statements about our prospects, objectives and strategies, I refer you to the cautionary statement concerning forward-looking information found on our public record which is also available at aircanada.com or on SEDAR+. The record also includes an explanation of the non-GAAP measures that we sometimes use as well as a reconciliation with the most directly compatible GAAP measure. As we note in our most recent filings, measures affecting trade relations between Canada and its partners may affect business or economic conditions generally or lead to changes in demand for air travel overall for some destinations. Air Canada is monitoring these developments and assessing their impacts. [Interpreted] The meeting will happen in French and English. Participants can either intervene in either English or French. And our proceedings will be translated simultaneously. If you are here in person, you can choose to listen using a listening device near the entrance of the room. And if you are joining us online, you may choose the channel of your choice in doing so, including a direct floor channel, if you prefer that option. [Interpreted] Registered shareholders and proxy holders who have joined the meeting in person can use and take the floor in the aisle. If you do so, please give your name and tell us whether you're a shareholder or a proxy holder. You may also share your questions or comments in the messaging tab on your webcast screen. [Interpreted] Mr. Chair, I will give you the floor for the follow-up of our meeting.

[Interpreted] Thank you, Marc. Following the opening remarks, we will turn to the proposals in our information circular. Then I'll share some remarks about our 2024 financial year, followed by a Q&A session. Our Board is proud of how Air Canada has restored its business, operational depth and financial position through an eventful year. We're proud of how our leadership team and our over 40,000 employees have done so while staying true to the long-standing values and priorities that have guided us through challenging and other times. These include remaining dedicated to safety first, always our overarching priority. We've seen all too recently how important this value is for all of us in our industry, and our thoughts remain with all those affected by recent incidents and their families. Our priorities and values also include striving to gain the trust of our customers and others by acting on our commitment to rise higher, keeping customers at the heart of what we do. Working passionately to nurture innovation and create an environment where everyone is treated with respect and can contribute the best of themselves, continuing to encourage sustainability while creating efficiencies and furthering productivity. We're deeply grateful for the unwavering commitment and passion of all our employees in serving our customers. In 2025, we are celebrating 60 years since our name was changed to Air Canada, reflecting our then expanding reach beyond Canada. Still today, Air Canada embraces the best of Canada at home and around the world, which begins with glowing hearted hospitality and with care and class. We proudly carry Canada's flag and are equally proud to be made up of employees from all over the world and to serve a global customer base. [Interpreted] We're also proud of Air Canada's commitment regarding our official languages, which we use to help promote French, including with our stakeholders in Quebec, where our head office is located. We appreciate the voting support every board member nominee received from shareholders in the run-up to today's meeting. Together, they bring remarkable experience and expertise into the boardroom, drawing on so many backgrounds and perspectives in advancing our priorities in a changing world. The Board and its committees oversaw management's progress in 3 key focus areas for Air Canada, namely financial performance, strategic and operational initiatives and sustainability priorities. This involved a wide range of customer risk mitigation and strategic objectives about issues that matter to us and to our customers and other stakeholders. Your Board has also continued to act and plan on its continuing renewal, adding 2 new Board members over the past 5 years, but also relying on Board continuity and its collective experience and industry knowledge, which have proven critical to its efficient operation through an unprecedented period. This year, we've reached at least one meaningful milestone. If all nominees are elected at today's meeting, 42% of our Board will be women, achieving a relative state of gender representation. Our policy will now be that men and women shall each comprise at least 35% to 45% of the Board. And as we approach the end of Michael Wilson's term on the Board, we thank him for his commitment, leadership and guidance through an unprecedented period of global crisis and uncertainty. Finally, our Board joins everyone at Air Canada in our gratitude to our customers for their loyalty and to our shareholders for their trust and investment in our company. We know that the annual meeting is a special moment in our dialogue with our shareholders on a number of topics. Last year, one of the shareholder proposals you voted on concerned the format of these meetings. We saw this as an opportunity to consult with you to help inform how we decide to meet in the future. [Interpreted] Last year, we took note we confirm our intention to hold an annual -- our annual shareholder meeting in person or in the hybrid format, except in the event of force measure or any other important reason. Your participation is important to us and participating begins with voting. This year, we wanted to underscore this by making a charitable donation to the Air Canada Foundation for each of the shareholder accounts that will have voted their shares at today's meeting. [Operator Instructions] Our meeting has been streamlined to allow for as much as possible for our remarks and our Q&A session. Marc will now speak to certain formalities and the matters to be voted on. Marc?

[Interpreted] Thank you, Mr. Chairman. I said that the vote is now open for all items on the agenda up to vote. If you have already voted, there's nothing that you need to do unless you want to change your vote. You will find the instructions to such effect in the documents tab. If you're joining us online, if at any moment you need assistance, you can speak to an attendant if you're here on site, in person or you can reach us by e-mail, as indicated in the user's guide in the documents tab on your screen. [Interpreted] Thank you for having confirmed your status as a Canadian or non-Canadian so that we can comply with applicable regulations and requirements. This will allow us to confirm that no adjustment to the variable voting rights will be necessary today. [Interpreted] We ask shareholders to send us their questions as soon as the meeting documents were published. You may also do so now through the messaging tab on your screen. We plan to respond to all of your questions during the question period indicated on the agenda. [Interpreted] If you have any questions or comments that should be dealt with before this question period, please lead us -- let us know clearly in advance and in a timely manner. In every case, all you have to do is click on the messaging tab on your screen. And if you are on site present, you can go to the microphone that is in the room. [Interpreted] Representatives of TSX Trust Company will be here with us today and have accepted our meeting. Chairman's invitation to act as scrutineers. We thank them for their assistance. The next item on the agenda is to submit Air Canada's financial statements for 2024 to the shareholders, which has been done. Our financial statements were published in February 2025 and may also be consulted in the documents tab on your screen. Mr. Chairman, the floor is yours.

[Interpreted] Thank you, Marc. I don't see any question about this item on the agenda for us or our auditor. So we'll move to the next items on the agenda.

[Interpreted] Mr. Chairman, 3 management proposals presented today. All these proposals are described in the management's proxy circular regarding this meeting. Based on the votes counted before the meeting was called to order and the number of votes that could be cast during the meeting, we know that all the resolutions submitted to a vote today will be approved by a necessary majority. [Interpreted] We have ensured that each proposal was moved or seconded as is the case by our colleagues from Air Canada from across our global network. We thank them for participating in the meeting in this manner and helping the whole thing go very smoothly. [Interpreted] The first item put to a vote is the election of directors. The nomination of the following 12 people was duly proposed and recommended by the Board: Amee Chande, Chris Clark, Gary Doer, Rob Fyfe, Michael Green, Jean Marc Huot, Claudette McGowan, Madeleine Paquin, Michael Rousseau, Vagn Sorensen, Kathleen Taylor and Annette Verschuren. [Interpreted] We thank our colleagues for having moved and seconded the election of these nominee directors. No other person was nominated for election as a director. Mr. Chair, the floor is yours.

[Interpreted] Seeing no questions or comments from our shareholders. I encourage you to vote using the platform for such purpose. Marc, could you move to the second item on the agenda, please?

[Interpreted] Thank you, Mr. Chairman. The Board of Directors also recommends voting for the appointment of the auditor, PricewaterhouseCoopers until the end of the next Annual Meeting of Shareholders. [Interpreted] We thank our colleagues for having moved and seconded the resolution for the appointment of the auditor. Back over to you.

Seeing no questions or comments from our shareholders, I encourage you to vote using the voting tab on your webcast screen. Marc, would you move to the third item on the agenda?

[Interpreted] Yes. Thank you, Mr. Chairman. The Board of Directors also recommends voting for the next proposal that it be resolved that on an advisory basis and not to diminish the role and responsibilities of the Board, the shareholders accept the approach to executive compensation disclosed in Air Canada's management proxy circular provided in advance of the 2025 annual meeting of its shareholders. [Interpreted] The wording of the advisory resolution is reproduced in Schedule A of the circular. We once again thank colleagues for having moved and seconded the resolution regarding the advisory resolution. Mr. Chairman, back over to you.

Again, seeing no questions or comments from our shareholders and proxy holders, once again, I encourage shareholders to cast or change their votes now on this or any prior proposal using the voting tab on your webcast screen as we prepare to close the ballots in a few minutes. Marc, would you move to the next item on the agenda?

[Interpreted] As described in our circular Air Canada received 3 proposals from the Mouvement d'éducation et de défense des actionnaires, the MÉDAC, which appears in Schedule B of our circular. [Interpreted] Following our discussions with MÉDAC and in particular, regarding certain information -- additional information and our intention with regards to the format of our annual meetings going forward, MÉDAC agreed to withdraw their 3 proposals which will not be submitted to a vote at the meeting. [Interpreted] Air Canada agreed to reproduce the withdrawn proposals and to give MÉDAC an opportunity to speak to them at our meeting. Mr. Chairman, the floor is yours.

[Interpreted] Thank you, Marc. I would remind registered shareholders and proxy holders that they may submit their questions or comments to us at any time before the end of the question period. However, 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 of the agenda. [Interpreted] I would now like to invite the representative from MÉDAC, Mr. Willie Gagnon, to present his organization's shareholder proposals. Mr. Gagnon, you have the floor.

[Interpreted] Yes. Hello. Thank you very much. Can you hear me?

[Interpreted] Yes.

[Interpreted] Hello, Mr. Chair. This is -- I'm the President of MÉDAC. As the Secretary said, we submitted 3 proposals this year. I'm very happy to be able to see you in person and to see you in person here this year. We're very happy with what happened last year. [Interpreted] I'll remind you that the company did not issue the vote recommendations for or against our proposal asking for in person meetings to come back. I also remind you that following last year's vote, we received 82.22% of people in support of our meetings, and we see that here today. So I counted about 30 people here in the room. I hope that the reason why there are fewer people now than in 2019, the last meeting was in 2019. So because people are less used to going in person. So I hope that, that was changed. [Interpreted] We talked a lot about this issue, specifically with regards to the number of people who participate in meetings, the number of people who are there in person, the number of people who are virtually there as well. In the future, it would be nice to have those numbers. And so at the beginning of the meeting to say we have x number of people in the room, x number of people online. And that way, we can see what the effect of in person meetings is. [Interpreted] We are happy, we're happy, we're happy. Yes, we're very happy. We are very happy that you sent the proposal. We didn't know if you were going to redo proposal before the publication of the circular. Anyway, I'm not really sure. Anyway -- but we are happy. Yes, we are happy. [Interpreted] As for the second proposal on Page 8. Obviously, no vote on that here today. Not Page 8 -- sorry, Page 84. On Page 83, we submitted a proposal on languages requesting that we understand what languages you require from employees for each job. You agreed with us -- you agreed with us with regards to what you were going to disclose around information and the particular case of the air industry, the case specifically to you is that not only do you ask for the languages, but also the languages that employees on some airlines -- some lines need to master. [Interpreted] So on Page 39 of the circular, this is the French circular, you say that there are more than 80 languages spoken within the company. More than half of employees speak both official languages, 40% of employees speak at least another language. And so there's all sorts of information, which previously was not available. We understand following the discussions that we've had with you that this information is published every year. And I am also saying that you're not going to be the only company to do that. So there are other companies that have accepted to do this. [Interpreted] Furthermore, in the context of negotiations. And this is part of our campaign. You're not the only company that has received these proposals. So thank you very much. We are once again very happy and we sent for technical questions, our proposals to ensure that the company has done the follow-up that they committed to. So following the advisory vote on compensation for upper management last year, on executive compensation last year. [Interpreted] There was close to 30% of shareholders who oppose that, the vote, and visibly you did a lot of work to try to understand why. You did a lot of the work to, attempt to understand who oppose the vote and you put measures in place to attempt to modify the situation. We are happy with what we see. [Interpreted] That is what we expect from a company generally speaking, who doesn't have several or the same level of support that we are used to seeing elsewhere. And so the 30% determined that was judged or determined significant. And we expect that we don't have to send you a proposal like this every single time. And so what you've done without these on being asked, we expect that you do it again, if ever this happens again. Anyway, we are happy on all fronts, and we will continue to maintain our dialogue with you specifically around the campaigns that we put forward. Mr. Chairman, thank you very much. It's been a pleasure.

[Interpreted] Thank you, Mr. Gagnon, we share your interest with these questions. Thank you very much for your engagement. With all proposals having been presented and with the polls having been closed, I'll now ask Marc if he could share preliminary results.

[Interpreted] Thank you, Mr. Chairman, according to the number of final votes that we have -- that have been casted, we confirm that the 12 nominees for election as directors were elected. Their term of office will end at the close of the next annual meeting of shareholders. The shareholders also approved the appointment of our independent auditor, PricewaterhouseCoopers and the advisory goat -- vote the -- advisory vote on the Board's compensation to executive compensation. Mr. Chairman, the final -- when voting results will be filed on SEDAR+ shortly after our meeting. I will turn the floor back over to you, Mr. Chairman.

[Interpreted] Thank you, Marc. The formal proceedings of our meeting to allow me to share some additional remarks. Your company, Air Canada, demonstrated wide-ranging strength in 2024. This includes its ability to adapt to sometimes difficult market conditions. Our results reflect the work we're doing to set up our airline for success in the future. During the year, we generated record operating revenue of near $22.3 billion, an increase of $422 million from 2023. Our adjusted net income was over $1.3 billion and adjusted earnings per diluted share was $3.55. We delivered $1.3 billion in free cash flow and ended the year with total liquidity of $9.2 billion. Generating free cash flow and maintaining ample liquidity have become even more critical. I was very pleased that with these earnings, we were able to return value to you. We bought back and canceled more than 35 million shares during the year and in early '25. [Interpreted] More importantly, we safely carried 47 million people who chose to fly with us in 2024. I thank our customers for their loyalty. Last year, we worked very hard to improve ourselves. Last year, in terms of punctuality, we made an 8-point gain in our onetime performance in 2024, making for a 17-point improvement since 2022. Furthermore, we sharpened our baggage delivery rate which now reaches nearly 99%. The measure of this success is the large number of awards given Air Canada in 2024. Yet we're not resting on these accomplishments. And with our customers foremost in our minds, we remain deeply committed to further improvement in 2025. We continue to be guided by 4 corporate priorities. The first of these is funding our future, ensuring we have the resources to fulfill our plans, seize opportunities or cope with the unexpected. In 2024, we executed capital allocation priorities exactly as planned. Notably, we strengthened our balance sheet by further reducing debt. Further out, we have ambitious plans. Achieving these requires that we drive revenue growth and increase our revenue by thoughtfully managing our network and also by offering a stronger value proposition. By this, we mean better products, especially premium products, our loyalty program and through IT and digital opportunities. This is why we anticipate significant investments over the next 5 years in technology, in aircraft reconfiguration and upgrades and in maintaining our infrastructure, including lounges and airports. We'll also invest in fleet reliability through scheduled maintenance. This will help with OTP, a key determinant of customer satisfaction. Moving in lockstep with our investment program will be a focus on balance sheet management. Keeping expenses down and meeting our cost and EBITDA objectives will remain our top financial goals. We have a number of operational initiatives across the organization to reduce CASM. This brings me to another benefit of our strong financial performance. It has allowed us to develop an ambitious fleet plan without compromising our balance sheet. These investments will help us achieve a second priority, reaching new frontiers. Our network ambitions are anchored to our 3 geographically well-positioned hubs. We have an efficient fleet with a global reach, enabling Sixth Freedom growth and the diversification of our customer base and points of sale. Our varied products complement this by appealing to all types of customers globally. This includes those looking for package holidays and cruises whom we serve through Air Canada Vacations, which celebrated its 50th anniversary this year and delivered a strong performance in 2024. Similarly, after a few slow years in the cargo industry, Air Canada Cargo revenue was up $67 million or 7% from 2023. Our network strategy also leverages decades of past, present and future immigration that are expected to translate into higher international demand. In 2024, capacity increased by 5.4% and service was launched to 4 new stations. This year, we're starting or increasing service to many other destinations. [Interpreted] We are exciting -- excited. Future forward -- we have a future forward way of growing our network, and this is through intermodal and multimodal partnerships. In 2024, Air Canada joined Cadence, the consortium building with Alto, the Toronto--Quebec City High-Speed Rail Network. We will also be able to contribute to the project's huge impact and help promote intermodal transfers for all travelers in Canada. These intermodal partnerships also promise significant environmental benefits. More immediately, in terms of network in response to seeing a recovery on the Atlantic, we've shifted capacity from Asia where overall market capacity is up substantially. This highlights another of our great strength. We can move assets easily around the world to maximize returns. Our ability to pivot is also helping us in the uncertain tariff environment in North America with its implications for cross-border travel. By mid-March, the bookings on the transborder market overall for the next 6 months were down about 10% year-on-year according to our data, and our own numbers were of a comparable magnitude. As announced, we've shifted some capacity primarily from sun destinations by using smaller aircraft or reducing some frequencies. That's allowed us to add capacity to other markets where demand is stronger, especially the transatlantic market. We continue to monitor the situation. [Interpreted] Amid this uncertainty, however, one thing we do know is that a sure way to keep customers and win new ones by elevating the customer experience. This is our third priority, and we are doing this in both official languages. We are making progress. Our Net Promoter Score by which we gauge customer satisfaction rose 11 points in 2024 over the preceding year. In addition to solid gains in OTP and baggage delivery, this improvement can also be attributed to the new programs and investments we've made in the airport and flying experience. Many of these involve technology. Another innovation was the creation of our proactive customer care team. This round-the-clock team located in our operations control center helps employees with customer recovery in real time. In its first 6 months, the team supported over 50,000 customers. This not only makes things better for our customers, but also saves us related costs. In airports, we're launching our care and class program after a trial at Ottawa. It will empower our agents and provide them with a toolkit, including new mobile tools to resolve issues on the spot. Meeting customer expectations also includes making changes when we can do better, such as in the way we handle indigenous sacred and ceremonial items. Another area we've similarly emphasized is in supporting those traveling with the disability. We had 1.4 million accessibility requests in 2024, a nearly 9% increase from '23. Satisfaction with accessibility assistant showed a notable improvement over the course of 2024 based on the NPS. This is accounted for by steps we took last year, including investments in equipment such as 27 new Eagle lifts across Canada. We were proud to act on our commitment by sponsoring the Canadian Paralympic team at the Paris Paralympic games as part of our support to all our Olympians and Paralympians. We're enhancing the customer experience in other ways. Customers are enjoying new food and beverage offerings. For example, we recently named our new celebrity chef, Masaki Hashimoto, and our Glowing Hearted program will emphasize the textures, colors and materials found in Canadian nature as we refurbish our aircraft interiors, beginning with the XLR aircraft. WiFi is now both an essential tool for travelers and a necessity if we are to spare our Gen Z customers' smartphone withdrawal. Recognizing this, we announced free WiFi across our fleet to all Aeroplan members. [Interpreted] Another critical area of investment for previous -- or sorry, for premium customers, is airport lounges. We recently opened a new cafe in Montreal, and we plan to add and renovate many of our lounges over the next several years. In addition to these hard spec improvements as we look to the future, IT will become even more central to the customer experience, including through what we call the Harmony program. With 80% of customers using online services, we're offering new functions such as mobile and apps for back recovery, rebooking on the day of travel and self-service backdrop at airports. With Vancouver Airport, we've also begun offering digital identification as a boarding option for almost all domestic flights. Finally, Aeroplan has gone from strength to strength. And in 2024, it's saw records in active members and redemption volumes as its third-party gross billings rose 10% to $1.8 billion. Aeroplan also celebrated its 40th birthday. Beyond great products for an airline to truly succeed, it requires skilled people who can deliver excellent customer service. We, therefore, invest in training and tools so that they can take care of our customers. We've also launched our new Elevate program focusing on empathy, building trust and empowering our people by leading with care and class every day. More than 2,000 senior and mid-level managers have begun this training. Our success is well recognized. Apart from improving customer service, our strong program saves us money on recruitment and training. It's also meaningful that we have above-average retention compared to the transport industry overall. In 2024, we were pleased to achieve a new labor contract with our pilots. It had been 10 years since we last negotiated a contract, adding to the complexity of any bargaining of this nature. Reaching an agreement with minimal disruption underscores the commitment of all stakeholders to Air Canada's long-term success and to customer service. Lifting each other up also means contributing to the communities we serve. We've continued to work with the Air Canada Foundation, which supported 360 Canadian charitable organizations dedicated to the health and well-being of children. We also advanced our representation and inclusion goals through community outreach and engagement. We want to see a more inclusive and diverse aviation industry, broadening the pool of talent we can draw on. In terms of the environment, in 2024, we further pursued our climate ambitions. Our approach is multifaceted and includes fleet renewal, electrification of ground vehicles and encouraging the development of sustainable fuels at scale. To this end, in 2024, we procured nearly 78 million liters of sustainable aviation fuel from Neste and purchased over 100,000 liters of low-carbon aviation fuel from Parkland, the first batch of such fuel produced in Canada. Much more is needed, however, for us to meet our collective goals, and we're engaged with all stakeholders to that end. We're also committed to community-focused environmental projects through partnerships such as the Jane Goodall Institute of Canada and our sustainability scholarship for students. [Interpreted] I want to conclude by expressing our gratitude to Air Canada's over 40,000 employees globally for their hard work and dedication and for their commitment to safety and well-being of our customers, also to my colleagues on the Board for their guidance throughout the year, and as usual to our shareholders for their trust and their investment in our company. Finally, as we approach our 90th year of operation, we want to underscore how proud we continue to be to carry Canada's flag and how seriously we take that responsibility. We are, as always, committed to sharing the best of Canada at home and abroad. And as we serve Canadians in connecting them with each other and the world, this includes working hard to live up to our commitments: acting with care, humility and respect and being financially responsible and mindful of our stakeholders. This has been true historically and will remain so in the future as together, we face new challenges and opportunities. [Interpreted] We are looking forward to reporting our progress at our annual meeting in 2026. So with that, fellow shareholders, we can now take your questions during the question period. I will be thrilled to take any of your questions or comments and may ask members of Air Canada's executive team to respond to some of them. I would ask those of you who would like to ask a question to please go to the microphone, confirm that you are ready to shareholder or proxy holder. [Operator Instructions] Are there any questions?

[Interpreted] Mr. Chairman, William Gagnon from The MÉDAC. There are no questions, and so I'll ask one. You addressed the issue of tariffs. You talked about a war, a tariff war with the Americans. You have measures that you have put in place to attempt to minimize the impact these tariffs could have on the company. And you talked about decreasing the size of some devices on some lines decreasing frequencies putting planes elsewhere. [Interpreted] Do you have scenarios? Have you looked at the financial impact that all of this may have on the company? You talked about measures. But what are you concerned about as a financial impact in this situation that everybody is talking about everywhere? And so I believe that Air Canada will not be sheltered from this. Do you have any estimates, anything to share?

[Interpreted] Thank you for your question. To better answer, I will answer in English, if I may. It's a good question. And obviously, it's something that we monitor every day, and it is something you need to monitor on an everyday basis because basically, there is -- there is new news every single day. However, it is far too early to draw conclusions. The best we can do is to stay agile to prepare ourselves for what might come and to build up as much flexibility we can. I mentioned the fleet already. That's one point to build up flexibility there. We have a lot of flexibility in our network. We can redeploy capacity across our different regions and so on. Am I concerned? Yes, definitely, I'm concerned. However, we also have to remember that and we have sort of a live situation now, you can say, I said in my remarks before, that we're seeing around sort of 10% effect on the transborder. However, we're seeing very strong demand on other areas. So there is also a sort of a situation where customers may be sort of just they still go on vacation. For instance, they just go elsewhere and so on. For instance, we saw transatlantic being very strong and so on. We meet very regularly in the Board to discuss this and try to sort of get the newest information always so that we can make informed choices and management is fully on top of it. And I'd say that up till now, at least it is, you can say, contained really well. And we've put in the mitigation that we can in the short term so that we can hopefully sort of mitigate the effects to the widest extent possible. But it's an everyday thing. It's a living thing, and we just keep it under review. But I'm happy about the flexibility. I'm really happy about the response from management in very quickly building up that flexibility. John, anything you want to add?

You covered it very, very well. I think that we've also taken steps to make sure we manage cost and as Vagn said, disciplined on capacity and how we allocate capacity. So I think you've covered it well. Thank you.

Are there further questions? Seeing no further questions in the meeting room or online, the discussion of matters for shareholder consideration is completed as we reconvene the formal part of our meeting. [Interpreted] Marc, any other questions?

[Interpreted] No. No other questions that are in place.

That wraps up our Annual Shareholders' Meeting. Having completed the business of the meeting, I want to thank everyone who made today's in-person and remote event possible. I also want to thank you all for joining today's meeting and for your questions. We're looking forward to your continued engagement in the year ahead. I now declare our 2025 Annual Meeting of Shareholders has concluded. [Interpreted] I now declare the end of our 2025 Annual Meeting of Shareholders. It is concluded. Thank you and enjoy the rest of your day. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]