Air Canada Just Told Investors That Fares Will Have to Rise

Air Canada lowered its 2026 profit outlook after a sharp rise in jet fuel costs, and executives made clear that passengers will be asked to cover part of the difference. The airline now expects 2026 EBITDA of 2.4 billion to 2.7 billion Canadian dollars, down from a range of 2.9 billion to 3.2 billion issued less than three months earlier.

The third quarter itself was strong on sales and weak on profit. Revenue hit a record 6.98 billion dollars, up 21 percent, but net income attributable to shareholders fell 47 percent to 139 million. Fuel was the culprit: the bill rose 75 percent, or about 906 million dollars, and fares recovered less than half of that increase. Air Canada aims to recover about 70 percent of the fuel jump in the fourth quarter.

The CFO said he expects fuel at roughly 1.72 dollars a litre, well above the company’s original plan. Statistics Canada reported airfares up 19.4 percent year over year in September. The carrier has paused or delayed eight fall transborder routes and cut four planned summer routes, while Canadian air return trips from the United States were down 23 percent in August compared with two years earlier.

There is growth on the map too. Air Canada announced seven new European and Asian routes for next summer, using A321XLR and 787 aircraft. The first of about 30 A321XLRs arrived in April, and the first two 787-10s are due this quarter. Management said the A321s burn 15 to 20 percent less fuel than widebodies on Atlantic routes.

Sources: The Canada Times