Air Canada (AC) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 operating revenues of CAD 6.3 billion (USD 6.3 billion), up 11% year-over-year, driven by strong demand, especially in premium and corporate travel segments, and robust passenger and cargo growth.

• Adjusted EBITDA reached CAD 719 million (USD 719 million), at the upper end of guidance, despite a 49% year-over-year increase in fuel expense and significant labor-related charges.

• Announced a 25% minority equity sale in Aeroplan for CAD 2.5 billion, valuing the program at CAD 10 billion, to strengthen the balance sheet and accelerate value creation.

• Returned CAD 1.6 billion (USD 1.6 billion) to shareholders through share repurchases since November 2024.

• Reinstated and updated full-year 2026 guidance, targeting adjusted EBITDA of CAD 2.9–3.2 billion (USD 2.9–3.2 billion).

Financial highlights

• Operating revenues: CAD 6.3 billion (USD 6.3 billion); operating expenses: CAD 6.481 billion (USD 6.481 billion).

• Adjusted EBITDA: CAD 719 million (USD 719 million), margin 11.5%; operating loss: CAD 215 million (USD 215 million).

• Net loss: CAD 178 million (USD 178 million); diluted loss per share: CAD 0.63 (USD 0.63); adjusted earnings per diluted share: CAD 0.40 (USD 0.40).

• Generated CAD 651 million (USD 651 million) in operating cash flow and CAD 174 million (USD 174 million) in free cash flow.

• Ended Q2 with CAD 8.9 billion (USD 8.91 billion) in liquidity and a net leverage ratio of 1.7x.

Outlook and guidance

• Full-year 2026 guidance: adjusted EBITDA of CAD 2.9–3.2 billion (USD 2.9–3.2 billion); ASM growth of 2.25–3.25% year-over-year; adjusted CASM up 5–6%; free cash flow of CAD 200–500 million (USD 200–500 million).

• Fuel price assumptions: CAD 1.38/liter for Q3 and CAD 1.29/liter for Q4.

• Assumes modest Canadian GDP growth, higher jet fuel prices, and CAD 1 billion (USD 1 billion) in sale-leaseback transactions in 2026.

• 2028 target: operating revenues ~$30 billion, adjusted EBITDA margin ≥17%.

• 2030 aspiration: operating revenues >$30 billion, adjusted EBITDA margin 18–20%.