Company Reports

Roughly 73% of Air Canada's 2025 passenger revenue came from trips that began or ended outside of Canada, with just over 20% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and prolonged travel restrictions in the Canadian market placed it under comparably more financial stress.

Revenue increased 11.3% to CAD 6.3 billion on nearly equal capacity to a year ago, while labor charges contributed to a CAD 215 million operating loss. Air Canada's fuel costs jumped 50% to CAD 1.7 billion compared with last year, and it recovered approximately half that amount in passenger fares.

Roughly 73% of Air Canada's 2025 passenger revenue came from trips that began or ended outside of Canada, with just over 20% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and prolonged travel restrictions in the Canadian market placed it under comparably more financial stress.

Air Canada's first-quarter revenue increased 11.3% to CAD 5.8 billion on 2.4% more capacity versus a year ago, while CAD 117 million operating profit offered 2% margin. The airline saw CAD 90 million of extra fuel costs and said it would trim capacity in 2026 as necessary to preserve margin.

Roughly 73% of Air Canada's 2025 passenger revenue came from trips that began or ended outside of Canada, with just over 20% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and prolonged travel restrictions in the Canadian market placed it under comparably more financial stress.

We lowered our forecast for long-term air-travel growth, based on the observed relationships among global economic growth, demand for air travel, and North America's share of global travel, which decreased our 2030 forecast of Canadian airline capacity by 2.5%.

Roughly 73% of Air Canada's 2025 passenger revenue came from trips that began or ended outside of Canada, with just over 20% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and prolonged travel restrictions in the Canadian market placed it under comparably more financial stress.

Roughly 73% of Air Canada's 2025 passenger revenue came from trips that began or ended outside of Canada, with just over 20% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and prolonged travel restrictions in the Canadian market placed it under comparably more financial stress.

Fuel prices spiked since March 6, as US-Israeli attacks on oil infrastructure in Iran threatened global petroleum supply. We updated our forecasts to reflect the impact of higher fuel costs through the second quarter, offsetting some of the benefit of long-term tax deferrals in our valuation.

Since the US and Israel launched an attack on Iran on Feb. 28, and Iran pledged to close the Strait of Hormuz to petroleum shipments, market prices for crude oil and other distillates like kerosene or heating oil have risen 12% in the two trading days since.

Air Canada's fourth-quarter revenue increased 6.8% to CAD 5.8 billion, and its operating profit of CAD 324 million came in at 5.6% margin. The year included four days of lost revenue in August due to a flight attendants' strike, as well as softer demand for travel to and from the US.

Roughly 73% of Air Canada's 2025 passenger revenue came from trips that began or ended outside of Canada, with just over 20% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and prolonged travel restrictions in the Canadian market placed it under comparably more financial stress.

Airbus issued a directive on Nov. 28, followed by regulators, for airlines to immediately roll back a software update on flight computers present in thousands of A320-family jets before operating them again. Most operators were able to patch their affected aircraft overnight by Nov. 29.

Air Canada's third-quarter revenue shrank 5.5% to CAD 5.8 billion, and operating profit fell 73% to CAD 284 million compared with the year ago quarter due in most part to four days of cancelled flights and lost revenue during peak August travel season stemming from its flight attendants' strike.

Roughly 73% of Air Canada's 2024 passenger revenue came from trips that began or ended outside of Canada, with just under 22% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and prolonged travel restrictions in the Canadian market placed it under comparably more financial stress.

On Aug. 19, Air Canada and the union representing its flight attendants reached an agreement to settle their disputed labor negotiations. While the agreement must be ratified by union members, the airline is able to resume operations and will restore its flight schedule in the next several days.

Roughly 73% of Air Canada's 2024 passenger revenue came from trips that began or ended outside of Canada, with just under 22% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and extensive travel restrictions in the Canadian market placed it under comparably more financial stress.

Air Canada's disputed labor negotiations with the union representing its flight attendants boiled over the weekend of Aug. 16-17, resulting in mutual recriminations and no new contract. Flight attendants defied an order from the Canada Industrial Relations Board to return to work.

Roughly 73% of Air Canada's 2024 passenger revenue came from trips that began or ended outside of Canada, with just under 22% from flights to or from the US. Air Canada capitalizes on so-called sixth-freedom traffic, which connects long-haul international routes to the US via layover in a Canadian airport. While we think Air Canada came into the covid crisis in better financial shape than many of its US-based peers, its international exposure and extensive travel restrictions in the Canadian market placed it under comparably more financial stress.

Air Canada will wind down operations before an Aug. 16 strike and lockout of its flight attendants after labor contract negotiations stalled. Around 130,000 daily passengers will have to rebook or cancel flights as long as the lockout lasts, which we anticipate will stretch to several days.