Montreal, February 14, 2026, 15:32 EST
Air Canada posted a C$296 million profit for the quarter, snapping back into the black and leaning on international and premium travel. The airline now sees 2026 core profit landing just above what Wall Street had penciled in, though management noted some softness on select U.S.-Canada routes. For this year, Air Canada put its adjusted EBITDA between C$3.35 billion and C$3.75 billion. That’s a range bracketing analyst expectations, which average roughly C$3.5 billion. Capacity growth is pegged at 3.5% to 5.5%.
The outlook’s in focus as airlines weigh if travel demand will stick around into 2026, even as expenses keep rising. Investors want to see if premium seats with higher yields can carry the load if cheaper ticket demand slips.
Trade disputes are pushing Canadian travelers and businesses to shift their flight patterns. Air Canada’s chief commercial officer, Mark Galardo, told analysts the airline is experiencing “almost a 30% increase” in corporate traffic to Europe and the Pacific. He linked that jump, at least in part, to companies looking to diversify away from the U.S. The carrier now counts premium travel as roughly 30% of passenger revenue. Canadians are booking more flights to Europe and Latin America over the U.S., Air Canada said—a trend U.S. airlines have also flagged as premium demand proves steady. Reuters
Air Canada posted fourth-quarter operating revenue of C$5.770 billion, with net income at C$296 million. Operating income reached C$324 million, and adjusted EBITDA came in at C$867 million for the period, according to its results release. In 2025, the airline reported C$22.372 billion in operating revenue and C$918 million in operating income. Free cash flow landed at C$747 million, while share buybacks exceeded C$850 million. Looking ahead, Air Canada reaffirmed 2026 guidance: adjusted EBITDA between C$3.35 billion and C$3.75 billion, ASM capacity growth projected at 3.5% to 5.5%, adjusted CASM set between 15.05 and 15.35 Canadian cents, and free cash flow seen in the C$400 million to C$800 million range, based on a Canadian dollar averaging C$1.36 per U.S. dollar and jet fuel at C$0.90 per litre. CEO Michael Rousseau said the airline is seeing “strong momentum in bookings” but is keeping a “sharply focused” eye on costs. Air Canada
Air Canada’s results dropped during a hectic period for Canadian earnings, as multiple major players topped last year’s profit numbers. Manulife notched a fourth-quarter profit of $1.5 billion, Sun Life came in at $722 million, Brookfield booked $743 million, and Fortis delivered $422 million, according to a Canadian Press summary.
Still, there’s no shortage of old headaches in Air Canada’s push toward premium and long-haul routes. Labour expenses have a way of outpacing ticket prices. Aircraft deliveries slip; the fixes aren’t cheap. And if fuel costs or the Canadian dollar suddenly swing, a solid quarter can vanish in a hurry.
Air Canada looks to “available seat miles” as its gauge for passenger capacity, a standard in the industry. For costs, it leans on CASM, shorthand for cost per seat mile. Stripping out jet fuel, CASM excluding fuel offers a clearer read, sidestepping fuel-price swings that can skew quarter-to-quarter comparisons.
The key unknown: will demand keep up as the airline packs in more seats and works to rein in unit costs? If transborder falters further, or if business travel slows, margins could start to feel the squeeze.
Air Canada is calling 2026 a growth year, but with a sharper focus on costs, not an outright snapback. Booking patterns in the coming months will really show how much of that projection actually sticks.
