Air Canada (AC) Q4 2025 earnings summary

Executive summary

• Achieved record Q4 2025 revenues of CAD 5.8 billion (up nearly 7% year-over-year) and full-year revenues of CAD 22.4 billion, reflecting strong premium and international demand, commercial strategy, and customer loyalty.

• Q4 Adjusted EBITDA reached CAD 867 million (25% increase), and full-year Adjusted EBITDA was CAD 3.1 billion, exceeding guidance.

• Maintained strong operational performance, improved on-time performance, and Net Promoter Score, and was recognized as Best Airline in North America at the 2025 Skytrax World Airline Awards.

• Managed labor disruptions, macroeconomic/geopolitical uncertainty, and cost discipline while returning over CAD 850 million to shareholders via share repurchases in 2025.

• Recognized with multiple industry awards, including top loyalty program honors.

Financial highlights

• Q4 2025 operating revenues reached $5.8B, up 7% year-over-year; full-year revenues were $22.37B, up 1%.

• Q4 operating income was $324M and adjusted EBITDA $867M; full-year operating income was $918M and adjusted EBITDA $3.12B.

• Q4 diluted EPS was $1.00, adjusted diluted EPS $0.65; full-year diluted EPS $1.86, adjusted diluted EPS $1.47.

• Free cash flow for 2025 was $747M; net cash flows from operations were $3.7B; total liquidity at year-end was $7.5B; leverage ratio at year-end was 1.7x.

• Adjusted CASM for 2025: 14.72¢ (full year), 15.34¢ (Q4), up 6.7% year-over-year, mainly due to labor and depreciation.

Outlook and guidance

• 2026 guidance: Adjusted EBITDA of $3.35–$3.75 billion; ASM capacity up 3.5–5.5%; adjusted CASM 15.05–15.35¢; free cash flow $400–$800 million.

• Net CapEx for 2026 includes $1 billion in expected sale-leaseback transactions.

• Assumptions include modest Canadian GDP growth, C$1.36/USD FX rate, and jet fuel at C$0.90/litre.

• 2028 target: ~$30 billion operating revenues, adjusted EBITDA margin ≥17%; 2030 aspiration: exceed $30 billion revenues, adjusted EBITDA margin 18–20%.