Managing Through Turbulence: Air Canada’s First Quarter Results

The aviation industry is never an easy place to operate. But the first few months of 2025 have been even more challenging than usual, as the second-term Trump administration in the U.S. has thrown the global economy into chaos. So far, Air Canada says it is weathering the storm.

 “Our first quarter 2025 results show Air Canada is effectively managing through a turbulent period,” said Michael Rousseau, President and CEO. 

“Total operating revenues of nearly $5.2 billion were stable year-over-year on similar capacity. Our revenue diversification strategy remains sound; sixth freedom revenues grew, and Air Canada Cargo and Air Canada Vacations delivered solid results in the period.”

Rousseau added: “Winter is always a challenging test, yet in the quarter we made progress in on-time performance, baggage delivery and customer satisfaction. Most importantly, we carried our nearly 10.8 million passengers safely and I thank all employees for their hard work taking care of our customers.” 

Here are some highlights of Air Canada’s Q1 numbers:

• Operating revenues of $5.196 billion for the first quarter of 2025, 1% lower year over year.
• Operating loss of $108 million and adjusted EBITDA* of $387 million with adjusted EBITDA margin* of 7.4%.

• Cash flow from operating activities of $1.526 billion and free cash flow of $831 million, a year-over-year decrease of $66 million and $225 million respectively.

• Leverage ratio of 1.3 at March 31, 2025, compared to 1.4 at end of 2024.

• Purchased and cancelled over 15 million shares in the quarter, completing the normal course issuer bid announced in November 2024.

• Announced intention to launch substantial issuer bid (SIB) to purchase and cancel up to $500 million of shares.

Rousseau says caution is the watchword going forward.

“Although advance ticket sales grew in line with our expectations in the period, we anticipate market conditions will remain unsteady with an uncertain economic outlook. In response, we are prudently moderating our expectations and concentrating on controllable factors such as cost management and strategic capacity adjustments to ensure strong performance in key financial metrics.”

Looking ahead to the rest of the year, Air Canada has made some adjustments to its guidance and major assumptions to account for recent trends in the commercial environment and fuel price expectations.

Expected capacity increase for the full year has been reduced to 1-3% from 3-5% and the forecast for adjusted EBITDA has been lowered from $3.4-$3.8 billion to $3.2-$3.6 billion.

Summing up the first quarter outcome, CEO Rousseau stated: “Our results demonstrate that we have a solid and diversified commercial foundation, a disciplined capital allocation strategy, and a skilled and dedicated team. We are encouraged that despite some shifts in certain markets, overall demand trends remain steady.”