This article first appeared on GuruFocus.
Adjusted EBITDA: Increased 61% year over year to CAD623 million, representing a margin of 10.8%.
Operating Revenues: Grew 11% year over year to CAD5.8 billion.
Passenger Revenues: Increased 11% year over year to CAD4.8 billion.
International Revenues: Increased 17% year over year.
Premium Revenues: Grew 11% year over year.
Corporate Revenues: Increased 14% year over year.
Sixth Freedom Revenues: Increased 18% year over year.
Adjusted Loss Per Share: CAD0.05 compared to a loss of CAD0.45 in the previous year.
Adjusted CASM: Increased 5.5% year over year.
Cash from Operations: Generated a record CAD1.8 billion.
Free Cash Flow: Delivered a record CAD1.6 billion.
Share Repurchases: CAD142 million spent, with a total cumulative investment of CAD1.5 billion since December 2024.
Net Leverage Ratio: 1.4 times EBITDA.
Q2 Adjusted EBITDA Guidance: Expected to be in the range of CAD575 million to CAD725 million.
Q2 Capacity Growth: Expected year-over-year growth of 0.5% to 1%.
Release Date: April 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Air Canada (ACDVF) reported a 61% year-over-year growth in adjusted EBITDA, indicating strong financial performance.
The company achieved record results for two consecutive quarters, showcasing the strength of its business model.
Air Canada (ACDVF) successfully negotiated new labor contracts with Unifor, reflecting positive union relations.
The airline’s diversified network and premium positioning contributed to strong passenger revenues and solid premium and corporate performances.
Air Canada (ACDVF) is entering a phase of fleet and product advancement, including the delivery of new Airbus A321XLR and Boeing 787-10 aircraft, enhancing its premium offering.
Negative Points
The sharp increase in global jet fuel prices has created significant external challenges, impacting the airline’s cost structure.
Air Canada (ACDVF) suspended its full-year guidance due to uncertainty in fuel prices, indicating potential volatility in future financial performance.
Operational inefficiencies related to capacity constraints and weather disruptions affected the company’s cost management efforts.
The geopolitical situation in the Middle East has added complexity to the airline’s operations and financial planning.
Despite fare increases, the company faces challenges in offsetting the full impact of rising fuel costs, with expectations to recover only 50% to 60% of the incremental expense in Q2.
Q & A Highlights
Q: Can you provide insights into revenue trends across different geographies and customer segments for the second quarter? A: North America shows resilience with higher yields expected in Q2. The Transatlantic region also anticipates higher yields, while the Pacific faces challenges due to regulated carrier surcharges in Asia. Premium yields and demand remain strong, expected to continue through Q3 and early Q4. – Mark Galardo, Executive Vice President, Chief Commercial Officer, President – Cargo
Q: How are you approaching capacity adjustments for the second half of the year, and how do you plan to manage CASM, ex-fuel? A: We are evaluating capacity on a two to three-month basis. For July and August, we plan to reduce capacity by trimming lower profitability flights and marginal frequencies. It’s too early to make definitive statements about Q4. CASM, ex-fuel, will be managed through strategic adjustments. – Mark Galardo, Executive Vice President, Chief Commercial Officer, President – Cargo
Q: What are the current booking trends for the third quarter, and how are higher prices affecting demand? A: We are not seeing any demand degradation for Q3. Current bookings and new bookings are above last year’s levels, with load factors about 2 points ahead. Despite fare increases, demand remains strong. – Mark Galardo, Executive Vice President, Chief Commercial Officer, President – Cargo
Q: How did fuel prices impact Q1 EBITDA, and what is the outlook for fuel costs in Q2? A: In Q1, we faced a CAD90 million headwind from fuel, with CAD45 million absorbed by hedging, leaving a net headwind of CAD55 million. For Q2, about a third of our fuel is not yet priced, and we expect continued volatility. – John Di Bert, Chief Financial Officer, Executive Vice President
Q: How is Air Canada managing fleet planning and potential retirements in light of current fuel prices? A: We are focused on navigating the current environment with a strong balance sheet. Our growth plan is based on structural demand, and we will continue to retire older aircraft like the A319s. Fleet standardization and efficiency remain priorities. – John Di Bert, Chief Financial Officer, Executive Vice President
For the complete transcript of the earnings call, please refer to the full earnings call transcript.