Air Canada Posts Record Q4 2025 Revenue, Signals Stronger 2026 on Bookings

Air Canada has reported fourth-quarter and full-year 2025 results, led by record fourth-quarter revenue and a return to solid profitability for the year. The airline said bookings are running ahead of last year and it expects a solid 2026, supported by fleet investments, tighter cost control, and continued capital returns.

Fourth quarter 2025 financial results (vs. fourth quarter 2024)

• Operating revenue: C$5.770 billion (US$4.24 billion), up from C$5.404 billion (US$3.97 billion).
• Operating income: C$324 million (US$238 million), up from -C$254 million (-US$186 million).
• Adjusted EBITDA: C$867 million (US$637 million), up from C$696 million (US$511 million).
• Net income + diluted EPS: C$296 million (US$217 million); C$1.00 (US$0.73), up from -C$644 million (-US$473 million); -C$1.81 (-US$1.33).
• Adjusted net income + adjusted EPS: C$191 million (US$140 million); C$0.65 (US$0.48), up from C$93 million (US$68 million); C$0.25 (US$0.18).
• Cash flow: C$423 million (US$311 million) from operations, down from C$677 million (US$497 million) from operations; -C$478 million (-US$351 million) free cash flow, up from -C$495 million (-US$363 million) free cash flow.

Full year 2025 financial results (vs. FY 2024)

• Operating revenue: C$22.372 billion (US$16.43 billion), up from C$22.255 billion (US$16.34 billion).
• Operating income: C$918 million (US$674 million), down from C$1.263 billion (US$927 million).
• Adjusted EBITDA: C$3.124 billion (US$2.29 billion), down from C$3.586 billion (US$2.63 billion).
• Net income + diluted EPS: C$644 million (US$473 million); C$1.86 (US$1.37), down from C$1.720 billion (US$1.26 billion); C$4.72 (US$3.47).
• Adjusted net income + adjusted EPS: C$471 million (US$346 million); C$1.47 (US$1.08), down from C$1.335 billion (US$980 million); C$3.55 (US$2.61).
• Cash flow: C$3.657 billion (US$2.69 billion) from operations, down from C$3.930 billion (US$2.89 billion) from operations; C$747 million (US$548 million) free cash flow, down from C$1.294 billion (US$0.95 billion) free cash flow.
• Long-term debt + lease liabilities; leverage ratio: C$11.576 billion (US$8.50 billion); 1.7x, up from C$10.915 billion (US$8.01 billion); 1.4x.

Strategic initiatives and key milestones of 2025

Air Canada said performance improved even with “shifting demand trends,” a summer labor strike by flight attendants that led to operating income loss of approximately C$375 million (US$270 million), and macro/geopolitical uncertainty.

Management emphasized a stronger focus on operational reliability, cost reduction, and cash generation, which helped support capital returns, including share buybacks. The carrier also noted better customer sentiment and recognition as the Best Airline in North America at the Skytrax World Airline Awards in 2025.

2026 outlook and growth expectations

Air Canada said it is seeing strong momentum in bookings versus last year and plans to grow its first-quarter 2026 operating capacity by about 2.5 percent percent versus first-quarter 2025.

For full-year 2026, it guided to adjusted EBITDA of C$3.35–$3.75 billion (US$2.46–$2.75 billion); ASM capacity up 3.5–5.5 percent; adjusted CASM of 15.05–15.35 cents; and free cash flow of C$400–$800 million (US$294–$587 million).