- Air Canada (TSX:AC) expects Q3 2025 operating income of C$250–C$300 million, down from C$1.04 billion in Q3 2024, due to over 3,200 flight cancellations linked to a CUPE labour disruption.
- The labour disruption’s financial impact is estimated at C$375 million, driven by lost revenue, customer compensation, and added costs, despite some savings from reduced operations.
- Full-year 2025 guidance has been revised downward, with adjusted EBITDA now forecast at C$2.9–C$3.1 billion (previously C$3.2–C$3.6 billion), and capacity growth expectations trimmed
- Air Canada stock (TSX:AC) last traded at C$18.38
Air Canada (TSX:AC) has released its estimated financial results for the third quarter of 2025, revealing a significant decline in earnings due to a major labour disruption in August involving the Canadian Union of Public Employees (CUPE), which represents the airline’s cabin crew.
The airline also reinstated and revised its full-year 2025 guidance, which had been suspended in August.
This content has been prepared as part of a partnership with Air Canada and is intended for informational purposes only.
Q3 2025 estimated results
In a media statement, Air Canada’s management said it expects to report operating income between C$250 million and C$300 million for the quarter ending September 30, 2025—down sharply from C$1.04 billion in Q3 2024. Adjusted EBITDA is projected to fall to C$950 million to C$1 billion, compared to C$1.523 billion a year earlier.
The airline attributed the decline primarily to the cancellation of over 3,200 flights in August, which led to a 2 per cent reduction in operated capacity year-over-year. The quarter’s results include approximately C$175 million in one-time non-cash pension plan amendments and other labour-related charges.
Impact of CUPE labour disruption
Air Canada estimates the total financial impact of the CUPE-related labour disruption at C$375 million in operating income and adjusted EBITDA. This figure includes:
- C$430 million in lost revenue, largely from customer refunds, compensation, and reduced bookings.
- C$145 million in cost savings from reduced flying activity, mainly due to lower fuel consumption.
- C$90 million in additional costs, including customer reimbursements and labour-related expenses.
The airline emphasized its commitment to customer service, having already processed over 60,000 claims from affected passengers. Updates and goodwill policies are available on its dedicated dashboard.
Air Canada and CUPE are now proceeding to arbitration to finalize the wage component of a four-year tentative agreement. No further labour disruptions are permitted during this process or the term of the agreement.
Updated full-year 2025 guidance
Air Canada has revised its full-year 2025 outlook to reflect the operational and financial fallout from the labour disruption:
| Metric | Updated 2025 guidance | Prior guidance (suspended Aug 18) |
| Adjusted EBITDA | C$2.9B – C$3.1B | C$3.2B – C$3.6B |
| ASM Capacity Growth | 0.5 per cent – 1.5 per cent vs. 2024 | 1 per cent – 3 per cent vs. 2024 |
| Adjusted CASM | 14.60¢ – 14.70¢ | 14.25¢ – 14.50¢ |
| Free Cash Flow | -C$50M – C$150M | Break-even ± C$200M |
The revised guidance assumes marginal Canadian GDP growth, an average exchange rate of CC1.39 per USD, and jet fuel prices averaging $0.92 per litre for the year.
Looking to the horizon
Despite the turbulence, Air Canada remains focused on stabilizing operations and restoring customer confidence. The airline’s leadership expressed optimism about the remainder of the year, citing strong demand trends heading into the winter travel season.
About Air Canada
Air Canada is Canada’s largest airline with a presence in more than 180 airports in Canada, the United States and internationally across six continents.
Air Canada stock (TSX:AC) last traded at C$18.38 and has descended 17.43 per cent since the year began.
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