Air Canada has returned to profitability, posting net income of C$296 million for the fourth quarter. The airline's operating revenue for the period reached C$5.77 billion, with adjusted EBITDA coming in at C$867 million.
Strong Outlook for 2026
Management provided an upbeat forecast for 2026, projecting adjusted earnings before interest, taxes, depreciation, and amortization in a range of C$3.35 billion to C$3.75 billion. This outlook surpasses average analyst estimates, which were around C$3.5 billion. The company anticipates capacity growth of 3.5% to 5.5% for the year.
Premium and International Travel Drive Results
A significant shift in travel patterns is underpinning the carrier's performance. The airline reported a nearly 30% surge in corporate traffic to Europe and the Pacific region, a trend executives partly attribute to companies diversifying travel away from the United States. Premium cabin revenue now constitutes approximately 30% of total passenger revenue.
While long-haul and premium demand remains strong, Air Canada acknowledged continued softness on certain transborder routes between the U.S. and Canada. CEO Michael Rousseau noted "strong momentum in bookings" but emphasized a "sharply focused" approach to managing costs amid rising expenses.
For the full year 2025, the carrier reported operating revenue of C$22.37 billion and operating income of C$918 million. The company also generated C$747 million in free cash flow and executed share repurchases exceeding C$850 million.
Looking ahead, Air Canada's 2026 guidance also includes a projected cost per available seat mile (CASM) between 15.05 and 15.35 Canadian cents, and free cash flow in the range of C$400 million to C$800 million. The forecast assumes an average exchange rate of C$1.36 per U.S. dollar and jet fuel at C$0.90 per litre.