Despite higher airfares and geopolitical uncertainty, the first quarter for Air Canada resulted in "strong passenger revenue" and "solid premium and corporate performances," president and CEO Michael Rousseau said on a Thursday evening earnings call.
"Despite fuel-driven fare increases, we continue to see strong demand across the network and throughout the booking curve," Rousseau said.
Air Canada chief commercial officer and president of cargo Mark Galardo concurred. "We are seeing resilient demand across most geographies and customer types," he said. "Corporate revenue increased 14 percent [year over year] on strength across all geographies."
Galardo credited tailwinds from "Canada's diversifying trade objective."
Premium revenue grew 11 percent year over year, with business-class revenue outpacing the economy cabin by 2 percentage points, Galardo added.
Fuel was a key topic, as it has been for other airlines on recent earnings calls. For the second quarter, Air Canada "expects to offset 50 percent to 60 percent of the incremental fuel expense through disciplined commercial and cost actions, including the benefits of fuel hedging," CFO John Di Bert said.
"Lower-priced inventory and our fuel hedging gains helped moderate the impact in Q1," he added. "We do expect elevated fuel prices to be more impactful in our results beginning in the second quarter."
Air Canada Q1 Metrics
Air Canada's first-quarter passenger revenue was nearly C$4.8 billion, up from C$4.3 billion a year prior. Total revenue was about C$5.8 billion compared with C$5.2 billion in Q1 2025. Net income for the quarter was C$48 million versus a loss of C$102 million a year prior.
U.S. transborder passenger revenue for Q1 was C$970 million, down from C$991 million a year prior. Atlantic revenue was up 14 percent year over year to nearly C$1.1 billion. Pacific revenue was C$714 million, up from C$631 million.
First-quarter capacity increased 2.4 percent year over year. Fuel costs remained steady at about 98 cents Canadian per liter due to Air Canada's fuel hedging.
The carrier suspended its full-year 2026 guidance but projected second-quarter capacity to increase 0.5 percent to 1 percent versus Q2 2025.
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