Air Canada says it has been shifting capacity toward high-demand international markets as Canadians’ appetite for cross-border travel continues to lag. Passenger revenues from the airline’s U.S.<\/p>\n
Air Canada says it has been shifting capacity toward high-demand international markets as Canadians’ appetite for cross-border travel continues to lag. <\/p>\n
Passenger revenues from the airline’s U.S. transborder segment dropped 11 per cent during the three months ended June 30 compared to last year, to $961 million, while domestic, Atlantic and Latin American markets saw a boost. <\/p>\n
“This second quarter was not business as usual,” chief commercial officer Mark Galardo told analysts on a conference call Tuesday.<\/p>\n
“We navigated through a period of significant economic and geopolitical uncertainty and we contended with reduced demand for transborder travel, an evolving geopolitical landscape affecting the Middle East and India, increased competition in China-Hong Kong and some currency fluctuations.”<\/p>\n
The Trump administration’s tariff threats, immigration crackdowns and musings about annexing Canada have prompted many Canadians to shun U.S. travel. <\/p>\n
The decline has shown up in Statistics Canada data. Last month, the agency said Canadian-resident returns from the United States by air declined more than 24 per cent in May compared to the same month a year earlier, continuing a five-month downward trend. Returning automobile traffic was down 38 per cent year-over-year in May.<\/p>\n
“We made the right early calls to match our capacity to the evolving demand landscape, and our diversified network and disciplined capacity management supported strong performance in international overall,” said Galardo. <\/p>\n
Domestic routes saw a three per cent boost in revenues during the quarter. <\/p>\n
“We kept a strong and steady presence and offered more options for travellers to explore the country, increasing capacity on key leisure destinations,” Galardo said.<\/p>\n
Capacity has also shifted from the transborder market to sun destinations going into the second half of the year. <\/p>\n
Galardo added the airline is closely monitoring the Canada-U.S. sector and has the flexibility to adjust to changing market conditions. <\/p>\n
Air Canada shares dropped almost 15 per cent in afternoon trading on the TSX to $18.82 after it reported a drop in second-quarter profits that missed analyst expectations. <\/p>\n
The airline reported net income of $186 million in the period, down from $410 million in the same quarter last year.<\/p>\n
Air Canada says that on an adjusted basis, it had a net income of $207 million in the quarter compared with $369 million in the same quarter last year.<\/p>\n
Adjusted earnings worked out to 60 cents per diluted share in the quarter, compared to 98 cents per share last year.<\/p>\n
Analysts on average had expected an adjusted profit of 72 cents per diluted share, according to LSEG Data & Analytics.<\/p>\n
Passenger revenues in the quarter amounted to $5.03 billion, up one per cent from last year on 2.5 per cent capacity growth.<\/p>\n
Despite the challenges, the airline reaffirmed its financial guidance for the year that it issued in May.<\/p>\n
Results were slightly below expectations on higher-than-expected costs but overall fairly neutral, said RBC analyst James McGarragle in a note.<\/p>\n
“We are taking a neutral view on the results, as the broader narrative of demand recovery and operational realignment remains intact despite the modest cost-related headwinds in the quarter.”<\/p>\n
This report by The Canadian Press was first published July 29, 2025.<\/p>\n
Companies in this story: (TSX: AC)<\/p>\n
Lauren Krugel, The Canadian Press<\/p>\n","protected":false},"excerpt":{"rendered":"Air Canada says it has been shifting capacity toward high-demand international markets as Canadians’ appetite for cross-border travel…\n","protected":false},"author":2,"featured_media":32510,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[45,49,48,100],"class_list":["post-32509","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-business","tag-ca","tag-canada","tag-markets"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/32509","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=32509"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/32509\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/32510"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=32509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=32509"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=32509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}