Air Canada Reports Second Quarter 2026 Financial Results
Air Canada reported its second quarter 2026 financial results and provided updated full-year 2026 financial guidance.
Quarterly Performance
- Operating revenues: CAD 6.266 billion, up 11% year-over-year.
- Operating expenses: CAD 6.481 billion, leading to an operating loss of CAD 215 million (margin –3.4%).
- Adjusted EBITDA: CAD 719 million, at the top end of guidance despite a 49% jump in fuel costs.
- Net loss: CAD 178 million (–$0.63 per diluted share).
- Adjusted net income: CAD 114 million ($0.40 per diluted share).
- Cash flow: CAD 651 million from operations, CAD 174 million free cash flow.
- Leverage ratio: 1.7, showing balance sheet stability.
"Operating revenues of $6.266 billion… Operating loss of $215 million with an adjusted EBITDA of $719 million"
Updated Full-Year 2026 Guidance
- Adjusted EBITDA: CAD 2.9–3.2 billion (lower than prior guidance of 3.35–3.75 billion).
- Capacity (ASM): 2.25–3.25% growth vs. 2025 (previously 3.5–5.5%).
- Adjusted CASM: 5–6% increase from 2025.
- Free cash flow: CAD 200–500 million (previously 400–800 million).
"Air Canada is reinstating updated financial guidance for full-year 2026… Adjusted EBITDA $2.9 billion to $3.2 billion"
Challenges & Assumptions
- Fuel prices remain highly volatile due to Middle East conflicts and shipping disruptions.
- Assumes Canadian GDP growth remains modest and demand trends hold steady.
- CAD expected to average 1.41 per USD in 2026.
- Jet fuel projected at C$1.38/litre in Q3 and C$1.29/litre in Q4.
"Air Canada assumes that the Canadian dollar will trade, on average, at C$1.41 per U.S. dollar… jet fuel will average at approximately C$1.38 per litre for Q3"
Long-Term Targets (2028–2030)
- 2028: Revenues ~CAD 30 billion, EBITDA margin ≥17%, free cash flow margin ~5%.
- 2030: Revenues >CAD 30 billion, EBITDA margin 18–20%, ROIC ≥12%.
"Air Canada announced the following long-term 2028 financial targets and 2030 aspirations… Operating revenues approximately $30 billion"
👉 In short: Air Canada delivered record revenues but was hit hard by fuel costs and disruptions, leading to a net loss. Guidance for 2026 has been revised downward, but the airline remains confident in its long-term growth and profitability targets.
