Air Canada Posts Q2 Results Hit by Fuel Costs, Confirms Sale of Aeroplan Stake

Buffeted by a 49% year-over-year increase in fuel expenses, Air Canada reported a net loss of $178 million in the second quarter.

Looking ahead to the full year, Canada’s largest carrier now forecasts adjusted earnings (EBITDA) of $2.9 billion to $3.2 billion this year. It suspended guidance in April after the start of the Iran war, but prior to that predicted EBITDA of $3.35 billion to $3.75 billion. 

The results came as the airline confirmed reports that funds managed by Blackstone Inc. and other investors would pay $2.5 billion for a 25% in its Aeroplan loyalty program. 

Air Canada says proceeds from the sale will repay an upcoming $1.2 billion bond maturity. Members of the investor group managed by Blackstone include Le Caisse de Depot et Placement du Quebec, PSP Investments and British Columbia Investment Management Corporation.

That announcement helped spur a 5.9% rise in Air Canada’s share price on Tuesday. Shares closed at $27.27, the highest level since June 2021, and the stock is up by more than 40% over the past 12 months.

There were positive metrics in Air Canada’s second quarter results, as airlines around the world share the struggle to achieve profit amidst inflated fuel prices.

“Air Canada delivered record second-quarter operating revenues, up 11% year over year, supported by strong demand across our network, including continued strength in premium and corporate travel, as well as Sixth Freedom traffic,” said Michael Rousseau, President and Chief Executive Officer.

“The performance in the quarter reflected the benefits of our diversified sources of revenue, the effectiveness of our pricing actions, and our continued focus on controllable cost execution. Cash generation and balance sheet strength remain key anchors of Air Canada’s financial foundation,” the outgoing CEO added. 

“Looking ahead, we are reinstating and updating full-year 2026 guidance, supported by resilient demand for premium and corporate travel, our fare actions to mitigate fuel-price volatility and our disciplined cost management.” 

Rousseau said that Air Canada believes an investment grade rating is achievable in the mid-term, reflecting the progress the airline has made in strengthening its financial position. 

“Beyond 2026, with Anko van der Werff announced as my successor, I am confident Air Canada has leadership continuity, a clear strategy and the financial strength to continue driving its long-term objectives and create significant sustainable value for all stakeholders,” Rousseau concluded. 

Second Quarter 2026 Air Canada Financial Results Summary

• Operating revenues of $6.266 billion.
• Operating expenses of $6.481 billion.
• Operating loss of $215 million with an operating margin of (3.4)% and an adjusted EBITDA of $719 million with an adjusted EBITDA margin of 11.5%.
• Loss before income taxes of $316 million and adjusted pre-tax income of $77 million.
• Net loss of $178 million and diluted loss per share of $0.63.
• Adjusted net income of $114 million and adjusted earnings per diluted share of $0.40.
• Net cash flows from operating activities of $651 million and free cash flow of $174 million.
• Long-term debt and lease liabilities of $12.794 billion and a net leverage ratio of 1.7.