Air Canada reports $178M Q2 loss, lowers 2026 outlook as fuel costs surge

Air Canada reported record operating revenue of $6.27 billion in Q2 of 2026, but higher expenses – including a sharp increase in fuel costs – pushed the airline to a $178 million net loss compared to a net income of $186 million during the same time last year

The airline released its second-quarter results Tuesday (Aug. 11), while reinstating and updating its full-year 2026 guidance, which had been suspended on April 30.

Operating revenues reached $6.266 billion for the quarter, while operating expenses totalled $6.481 billion.

READ MORE: Air Canada unlocks $2.5B from Aeroplan in minority stake deal

Air Canada also posted an operating loss of $215 million, representing a negative operating margin of 3.4 per cent.

“Air Canada delivered record second-quarter operating revenues, up 11 per cent year over year, supported by strong demand across our network, including continued strength in premium and corporate travel, as well as Sixth Freedom traffic,” said Michael Rousseau, president and CEO of Air Canada, in a press release.

“Capacity increased 0.3 per cent year over year, 0.2 percentage points below the lower end of our second quarter guidance mainly due to weather-related disruptions that negatively affected flight completion rates in the latter part of the quarter.”

Adjusted EBITDA reached $719 million, at the top end of Air Canada’s Q2 guidance range, “despite a 49 per cent year-over-year increase in fuel expense,” Rousseau added.

The CEO said the airline’s performance in Q2 reflected the benefits of “diversified sources of revenue, the effectiveness of our pricing actions, and our continued focus on controllable cost execution.”

Air Canada lowers 2026 outlook

Air Canada also reinstated its full-year financial guidance, but with lower expectations than the outlook it suspended earlier this year.

The carrier now expects adjusted EBITDA of between $2.9 billion and $3.2 billion for 2026, down from its previous forecast of $3.35 billion to $3.75 billion.

ASM capacity is also expected to increase between 2.25 and 3.25 per cent compared with 2025, versus the previously forecast increase of 3.5 to 5.5 per cent.

“Looking ahead, we are reinstating and updating full-year 2026 guidance, supported by resilient demand for premium and corporate travel, our fare actions to mitigate fuel-price volatility and our disciplined cost management,” stated Rousseau.

“Reflecting the progress we have made in strengthening our financial position, we believe an investment grade rating is achievable in the mid-term.”

“Beyond 2026, with Anko van der Werff announced as my successor, I am confident Air Canada has leadership continuity, a clear strategy and the financial strength to continue driving its long-term objectives and create significant sustainable value for all stakeholders.”

Air Canada sells 25% stake in Aeroplan

Alongside its earnings results, Air Canada on Tuesday announced a $2.5-billion minority investment in Aeroplan by funds managed by Blackstone, La Caisse and other institutional investors.

As previously reported, the deal will see the investor group acquire a 25 per cent non-controlling stake in Aeroplan, while Air Canada retains a controlling ownership interest and full operational control of the loyalty program.

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