Business · Companies · 2 hrs ago
Air Canada lowers 2026 profit forecast as fuel costs rise
Air Canada cut its 2026 adjusted EBITDA forecast as rising jet fuel costs put pressure on profits.
The Canadian airline now expects adjusted EBITDA, a measure of operating earnings, to be $2.4 billion to $2.7 billion, down from its earlier forecast of $2.9 billion to $3.2 billion.
It said it expects jet fuel to cost about $1.72 per litre in the fourth quarter, compared with its previous estimate of $1.29.
Fare increases have helped offset fuel costs, but have not kept pace with the rise in fuel prices.
Air Canada still reported record third-quarter revenue of about $7 billion, up 21 per cent from a year earlier, with strong passenger demand and higher cargo revenue.
The airline industry is watching whether higher fares will begin to weaken travel demand, which has so far remained resilient.
Air Canada said the challenging conditions may continue and that its financial position gives it flexibility to respond.
Air Canada lowered its 2026 adjusted EBITDA forecast as rising jet fuel costs squeezed margins.
The airline now expects adjusted EBITDA of $2.4-billion to $2.7-billion, down from its previous forecast of $2.9-billion to $3.2-billion.
Air Canada expects jet fuel to cost about $1.72 per litre in the fourth quarter, compared with its prior estimate of $1.29.
Third-quarter operating revenue was reported at $6.984-billion, up 21 per cent year over year.
The company said pricing, capacity and cost actions helped offset higher fuel expenses.
- Who
- Air Canada, the Canadian airline.
- What
- It lowered its 2026 adjusted EBITDA forecast as fuel costs rose.
- When
- Thursday, Oct. 29, 2026.
- Where
- Montréal, where Air Canada announced its results.
- Why
- Jet fuel costs rose faster than the airline could offset through fare increases.
This story does not have two clearly opposing sides.
Airlines raised fares sharply to cushion the impact of higher fuel costs.
Delta Air Lines and American Airlines cut their full-year earnings forecasts.
Air Canada reported third-quarter results and updated its 2026 financial guidance.
- 2026 adjusted EBITDA forecast
- $2.4-billion to $2.7-billion
- Previous adjusted EBITDA forecast
- $2.9-billion to $3.2-billion
- Fourth-quarter fuel price estimate
- $1.72 per litre, up from $1.29 per litre
- Third-quarter operating revenue
- $6.984-billion, up 21 per cent year over year
- Third-quarter adjusted EBITDA
- $936-million
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What people are saying
Decisive pricing, capacity and cost actions helped mitigate the impact of a $906 million year-over-year increase in fuel expense, with fuel prices 10 cents per litre above our third-quarter expectations.
While we expect the challenging environment to persist, our strong financial position provides us with the flexibility to respond to near-term developments.