Air Canada reported a net profit for the third quarter despite a strike in August by its flight attendants, which resulted in the cancellation of more than 3,200 flights that month, according to a Wednesday earnings release.
Third-quarter net income was C$264 million, down from the more than C$2 billion reported in Q3 2024. Air Canada estimated the financial effect of the labor dispute to be C$375 million for the quarter in operating income and adjusted earnings before interest, taxes, depreciation and amortization, CFO John Di Bert said on an earnings call.
"Excluding the strike disruptions, adjusted EBITDA would have aligned with expectations," Air Canada president and CEO Michael Rousseau said. The carrier on Sept. 24 had updated its third-quarter and full-year guidance to account for the strike effect.
Demand remained strong and booking patterns rebounded soon after the August disruption ended, Air Canada chief commercial officer Mark Galardo said. "This quarter and throughout the year, we mitigated the exposure to reduced demand between Canada and the U.S," he added. "In Q3, we quickly responded to Canadian growing interest to travel domestically. The transborder sector remained stable, albeit at lower levels adjusting for the strike. International markets continue to drive significant value."
Corporate Comeback
As other carriers have reported this earnings season, premium demand remains solid. "Front cabin revenues outperformed the economy cabin by 6 percentage points," Galardo said, adding that Air Canada continues to see a shift in consumer preference toward premium products. "Once thought of as mainly a corporate segment, we see an opportunity for leisure travelers taking our signature front cabin experience."
As for corporate, that segment's revenue improved about 11 percent year over year in September, according to Galardo.
"We continue to see strong corporate momentum," he said. "This is the segment that books closer in, and the latest data confirms the strength of September carried into October and is progressing throughout Q4."
North America remains the bulk of Air Canada's corporate revenue, but the airline is "noticing signs of increased international corporate strength," Galardo added. "In all, we are encouraged by the trends in the fourth quarter and what we are seeing for early 2026."
For Q4, "what you should anticipate is a continued double-digit increase in overall corporate revenue," Galardo said. "Basically, across all geographies, in particular [there's] a nice growth on the transatlantic."
Air Canada Q3 Metrics
Air Canada reported third-quarter passenger revenue of more than C$5.2 billion, down from the C$5.6 billion reported a year prior. The Atlantic region remained flat year over year, at nearly C$2 billion. Domestic Canada declined 4.5 percent to more than C$1.4 billion, while the U.S. transborder segment declined 17.6 percent to C$904 million.
Total Q3 revenue was nearly C$5.8 billion, down from the C$6.1 billion reported a year prior. Capacity during the quarter declined 2.1 percent year over year. Average fuel cost was 88.3 Canadian cents per liter, down from 98.2 cents a year prior.
Air Canada updated its full-year 2025 guidance to project a capacity increase of 0.75 percent year over year. Its prior outlook projected an increase of 0.5 percent to 1.5 percent compared with 2024.
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