MONTREAL — Air Canada has lowered its earnings outlook by hundreds of millions of dollars for the year thanks to sky-high fuel costs after a tough quarter that saw its bottom line nearly cut in half.
The country’s largest airline on Thursday forecasted adjusted earnings of between $2.4 billion and $2.7 billion versus the $2.9 billion to $3.2 billion it predicted less than three months ago.
The company said in a news release the revision “reflects Air Canada’s current expectation of higher fuel prices” for the rest of the year.
The darker outlook comes after its net income attributable to shareholders fell 47 per cent to $139 million year-over-year in the three months ended Sept. 30.
However, operating revenues jumped 21 per cent to a third-quarter record of $6.98 billion, as the Montreal-based company fell back on fare hikes to try to offset rising expenses that included a $906-million year-over-year fuel cost increase.
Chief financial officer John Di Bert said the company’s surging revenues reflect strong demand and more cash intake per passenger.
“While we expect the challenging environment to persist, our strong financial position provides us with the flexibility to respond to near-term developments. We remain focused on executing on what we can control,” he said in a release.
Airfares in Canada rose 19.4 per cent year-over-year in September, according to Statistics Canada.
National Bank analyst Cameron Doerksen said overall demand remains positive, with Air Canada indicating it had raised fares further in recent weeks.
“Recall that Air Canada was expecting to offset 100 per cent of higher fuel costs in the fourth quarter, but given the higher fuel costs so far in the quarter, we believe that is unlikely,” he said in a note to investors last week.
On an adjusted basis, the company’s adjusted earnings stayed flat at 75 cents per share last quarter, well above analysts’ predictions of 50 cents per share, according to financial markets firm LSEG Data & Analytics.
This report by The Canadian Press was first published Oct. 29, 2026.
Christopher Reynolds, The Canadian Press
