Air Canada (AC) Q3 2026 earnings summary

Executive summary

• Record Q3 operating revenue was $6.984B, up 21% YoY; passenger revenue reached CAD 6.3B, also up 21%.

• Adjusted EBITDA was $936M, with margin declining to 13.4% from 16.6% as sharply higher fuel costs pressured expenses.

• FY 2026 adjusted EBITDA guidance was lowered to $2.4B–$2.7B, with pricing and capacity actions aimed at fuel recovery and margin protection.

Financial highlights

• Revenue rose to $6.984B from $5.774B; operating expenses increased to $6.723B from $5.490B, including a $906M YoY increase in fuel expense.

• Net income attributable to shareholders was $139M versus $264M; adjusted net income was $214M versus $223M. Diluted EPS was $0.49 and adjusted diluted EPS was $0.75, flat YoY.

• Operating cash flow was $266M; free cash flow was negative $440M, versus positive $211M a year earlier. YTD free cash flow was positive CAD 1.3B, including ~CAD 500M from sale-and-leasebacks.

• Adjusted pre-tax income was CAD 328M.

Outlook and guidance

• FY 2026 adjusted EBITDA guidance was reduced to $2.4B–$2.7B from $2.9B–$3.2B; free cash flow guidance is breakeven ±$150M versus prior positive $200M–$500M.

• FY 2026 capacity growth is expected at ~2.75%; adjusted CASM growth is forecast at 5.5%–6.0%, with lower growth in H2 than H1.

• Q4 jet fuel assumption rose to C$1.72/litre from C$1.29; ~50% of Q4 fuel requirements remain exposed to price volatility, with expected cost offsets of ~70%.

• Guidance assumes C$1.39 per US$1 for 2026 and $1B of sale-and-leaseback transactions; modest Canadian GDP growth and current demand trends are also assumed.

• No 2027 guidance yet; planned Q1 2027 capacity was cut by 2 points, with further growth pacing under review.