Business · Companies · 2 hrs ago
Fuel costs surge for WestJet and Air Canada, squeezing profits
Higher jet-fuel prices are raising costs for Canada's major airlines.
The increase followed a war involving the United States, Israel and Iran that disrupted oil shipments through the Strait of Hormuz and damaged refineries.
WestJet says fuel costs are expected to double to $3.2-billion this year, pushing the Calgary-based airline into a loss.
Air Canada's fuel bill rose by $1.5-billion in the first nine months of 2026, while its third-quarter profit fell to $139-million from $264-million a year earlier.
Airlines have raised fares and fees and cut less profitable routes, but WestJet says competition has stopped it from increasing fares enough to cover the added costs.
WestJet and Air Canada used cash reserves rather than accepting government aid, while Porter Airlines and Air Transat received loans.
Fuel prices are expected to stay high, and WestJet has delayed plans for a public share offering.
WestJet and Air Canada say soaring jet-fuel prices have sharply increased their costs in 2026.
WestJet says it has paid $1-billion in added fuel costs and expects its fuel bill to double from last year to $3.2-billion.
Air Canada says its fuel bill rose by $1.5-billion in the first nine months of 2026, to more than $5-billion.
Air Canada’s third-quarter profit fell to $139-million from $264-million a year earlier, despite a 21 per cent rise in revenue.
WestJet says competition has prevented it from raising fares enough to cover higher fuel costs.
- Who
- WestJet and Air Canada, Canada’s two major airlines.
- What
- They report sharply higher jet-fuel costs that are squeezing profits.
- When
- In 2026; Air Canada reported its third-quarter results on Thursday.
- Where
- Canada.
- Why
- Jet-fuel prices rose after the United States and Israel began a war against Iran, disrupting oil and refined-product transit and damaging refineries.
This story does not have two clearly opposing sides.
The United States and Israel began a war against Iran, cutting off the Strait of Hormuz and damaging refineries.
U.S. Gulf Coast kerosene-type jet fuel sold for US$4.44 a gallon, compared with US$2.50 before the war.
Air Canada reported third-quarter fuel expenses of $2.1-billion and a profit of $139-million.
- WestJet added fuel costs
- $1-billion in 2026
- WestJet expected 2026 fuel bill
- $3.2-billion, double last year’s cost
- Air Canada first-nine-month fuel bill
- More than $5-billion
- Air Canada third-quarter fuel expenses
- $2.1-billion
- Air Canada third-quarter profit
- $139-million, down from $264-million a year earlier
- U.S. Gulf Coast jet fuel price
- US$4.44 a gallon on Tuesday; US$2.50 before the war
What people are saying
Right now we are literally paying double what we paid a year ago
We have to work under the assumption that fuel prices will stay elevated
An IPO requires a healthy environment, and the current environment is less healthy than it should be. So right now is certainly not the time to talk about this
foreseeable future