Air Canada says it had a net loss in the second quarter despite record operating revenues, as fuel costs soared 49 per cent, resulting in the airline lowering its 2026 guidance.
Canada’s largest airline posted a net loss of $178 million and a diluted loss per share of 63 cents, a drop from $186 million net income and diluted earnings per share of 51 cents the year before.
Chief executive Michael Rousseau said the airline’s strong pricing environment, resilient demand and continued focus on controlling costs helped absorb a significant external fuel shock.
“Through our pricing actions, capacity management and fuel hedging positions, we recovered about 50 per cent of the incremental fuel expense in Q2,” he said during Wednesday’s earnings call. “A strong demand we experienced in Q2 has remained intact throughout the booking window and across the network.”
The airline’s operating revenues of $6.3 billion, up 11 per cent year over year, were a record high for a second quarter and were driven by strong demand across the network, including in premium and corporate travel.
Its adjusted EBITDA of $719 million was ahead of market expectations, but a 23 per cent decline from the previous year’s adjusted EBITDA of $909 million. The adjusted EBITDA margin of 11.5 per cent was down from 16.1 per cent over the same time period.
It had an operating loss of $215 million, including $388 million of labour-related and other charges, down from an operating profit of $418 million from the prior year.
Adjusted net income was $114 million, down from $207 million, and adjusted earnings per diluted share was 40 cents, down from 60 cents.
Air Canada reinstated its full‑year 2026 financial guidance Tuesday, which it suspended at the end of April amid jet fuel price volatility brought on by the Iran war.
The adjusted EBITDA guidance for the year was revised lower and is now between $2.9 billion and $3.2 billion, down from the previous guidance of $3.35 billion to $3.75 billion.
“When compared to our expectations at the start of the year, we expect to recover a majority of the remaining fuel headwind in the second half of the year, with Q4 expected to be above 100 per cent,” said Rousseau.
