- Air Canada’s (TSX:AC) Q3 net income fell to C$264 million (EPS $0.88) as strike-related cancellations and weak U.S. travel demand hit results, despite revenues of C$5.77 billion
- August flight attendant strike cost the airline about $375 million in operating income and EBITDA, with over 3,200 flights cancelled during peak season
- The carrier reaffirmed full-year guidance, citing strong Atlantic markets and premium demand, while planning fleet renewal and U.S. route expansion for 2026
- Air Canada stock (TSX:AC) opened trading at C$18.10
Air Canada (TSX:AC) reported a sharp drop in third-quarter profit as a summer strike and softer transborder travel demand weighed on results, despite signs of recovery heading into year-end.
The airline posted net income of C$264 million, or C$0.88 per diluted share, for the three months ended September 30, down from C$2.04 billion and C$5.38 per share a year earlier. Adjusted net income came in at C$223 million, or C$0.75 per share. Operating revenue fell 5 per cent year-over-year to C$5.774 billion, while operating income dropped to C$284 million, reflecting an operating margin of 4.9 per cent. Adjusted EBITDA was C$961 million, down from C$1.52 billion in Q3 2024, with a margin of 16.6 per cent.
The decline was largely driven by an August strike by more than 10,000 flight attendants, which forced the cancellation of over 3,200 flights during the peak summer travel season. Air Canada estimates the labour disruption cost CC$375 million in operating income and adjusted EBITDA, including C$430 million in lost revenue and C$90 million in additional customer compensation and labour-related costs.
Adding to the pressure, transborder travel between Canada and the U.S. remained soft, with passenger revenue on those routes falling nearly 18 per cent year-over-year to C$904 million. Analysts attribute the weakness to lingering economic uncertainty and trade-related tensions, which have dampened demand for cross-border business travel.
“Our financial results, after adjusting for the strike impact, met our expectations, with strength in the Atlantic market and in our premium cabins,” the airline’s president and CEO, Michael Rousseau, said in a news release. “Operational metrics, such as on-time performance and net promoter score, exceeded both internal targets and last year’s levels for the quarter and year-to-date.”
Air Canada reaffirmed its updated full-year guidance, projecting adjusted EBITDA of C$2.95–C$3.05 billion and modest capacity growth of about 0.75 per cent versus 2024. The airline also announced the renewal of its share buyback program, signalling confidence in long-term growth despite near-term headwinds.
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) opened trading nearly 2 per cent lower at C$18.10 and has descended 16.76 per cent since the year began.
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