Air Canada Lowers 2026 Full-Year Profit Guidance Driven by Jet Fuel Cost Pressures. Flag carrier Air Canada released its financial results for the third quarter of 2026, generating total operating revenues of 6.984 billion Canadian dollars, an increase of 21% compared to the prior-year period. While sustained commercial passenger demand, improved passenger yields, and strong performance across the cargo division supported top-line growth, steep increases in operating costs—primarily driven by higher aviation fuel prices—compressed overall margins and prompted management to lower full-year profit projections.
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Between July and September, the carrier achieved a passenger load factor of 89%, reflecting a 2.6-percentage-point expansion compared to the third quarter of 2025. Passenger yield advanced by 11% year-over-year, while cargo revenues surged by 33%. Despite these commercial gains, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) contracted to 936 million Canadian dollars, down from 961 million reported in Q3 2025, yielding an operating income of 261 million. The primary headwind was jet fuel expenditure, which climbed by 906 million Canadian dollars year-over-year to reach 2.118 billion.
Reflecting these elevated operating expenses, Air Canada revised its full-year 2026 adjusted EBITDA guidance downward to a range of 2.400 to 2.700 billion Canadian dollars, compared to the previously targeted range of 2.900 to 3.200 billion. The carrier also reset its free cash flow expectations to approximately breakeven (with a variance of plus or minus 150 million Canadian dollars), stepping back from earlier guidance targeting positive cash generation between 200 and 500 million. Corporate leadership attributed the adjustments primarily to sustained high refined fuel prices anticipated through the final fiscal quarter.
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For the fourth quarter of 2026, Air Canada models jet fuel to average 1.72 Canadian dollars per liter, compared to earlier forecasts of 1.29 dollars. Furthermore, the company expects to mitigate approximately 70% of incremental operating cost overruns, versus the 100% cost-offset previously targeted. In parallel, the airline authorized a share repurchase program allowing the buyback of up to 25.2 million common shares—representing approximately 10% of its public float—between November 2026 and November 2027.
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