Air Canada (TSE:AC) Posts Earnings Results

Air Canada (TSE:AC) released its quarterly earnings results on Thursday. The company reported C$0.75 earnings per share (EPS) for the quarter, FiscalAI reports. The business had revenue of C$6.98 billion for the quarter. Air Canada had a net margin of 1.82% and a return on equity of 16.92%.

Here are the key takeaways from Air Canada’s conference call:

• Record third-quarter revenue and resilient demand: Operating revenue rose 21% year over year to CAD 7 billion, supported by nearly 6% capacity growth, an 89% load factor, and 11% higher yields. Premium, corporate, sixth-freedom, and cargo revenues all performed strongly.
• Higher fuel costs pressured profitability and guidance: Fuel expense increased by CAD 906 million as fuel prices rose 68% year over year, limiting adjusted EBIT growth and reducing the EBITDA margin to 13.4%. Air Canada lowered its 2026 adjusted EBITDA outlook to CAD 2.4–2.7 billion and now expects roughly breakeven free cash flow.
• Capacity growth is being moderated for 2027: The airline has removed more than two points of planned first-quarter 2027 capacity and is evaluating marginal flying, aircraft utilization, and ultra-long-haul routes to protect margins if fuel prices remain elevated. Management still expects to reach pre-pandemic capacity levels over time.
• Balance sheet and shareholder returns remain strong: Net leverage ended the quarter at 1.3 times, liquidity was CAD 8 billion, and there are no material corporate debt maturities until April 2028. An CAD 800 million share buyback reduced shares outstanding by approximately 10%, while a renewed NCIB is expected to be used opportunistically.
• Fleet renewal and cargo provide potential offsets: New A321XLR, 787-10, and A220 aircraft are expected to improve fuel efficiency and margins, while cargo revenue rose 33% and is benefiting from strong freight pricing and close-in booking patterns that allow higher fuel-cost recovery.

Air Canada Stock Up 0.2%

Shares of TSE AC opened at C$21.87 on Friday. The firm’s 50 day simple moving average is C$25.88 and its two-hundred day simple moving average is C$22.34. Air Canada has a one year low of C$16.45 and a one year high of C$31.45. The company has a debt-to-equity ratio of 478.10, a current ratio of 0.60 and a quick ratio of 1.05. The stock has a market capitalization of C$5.53 billion, a P/E ratio of 16.69, a PEG ratio of 0.02 and a beta of 1.86.

Analyst Ratings Changes

A number of research firms recently weighed in on AC. UBS Group upped their price target on Air Canada from C$24.00 to C$33.00 in a report on Thursday, August 13th. ATB Cormark Capital Markets cut their price target on Air Canada from C$45.00 to C$43.00 and set an “outperform” rating for the company in a research note on Tuesday. Royal Bank Of Canada raised their price objective on shares of Air Canada from C$28.00 to C$37.00 and gave the stock an “outperform” rating in a report on Thursday, August 13th. Jefferies Financial Group cut shares of Air Canada from a “hold” rating to a “moderate sell” rating and reduced their price target for the stock from C$26.00 to C$19.00 in a research report on Monday, October 19th. Finally, Canaccord Genuity Group raised Air Canada from a “hold” rating to a “buy” rating and dropped their target price for the company from C$29.00 to C$25.00 in a research report on Thursday, October 22nd. Eight research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average target price of C$32.12.

Air Canada Company Profile

Air Canada is Canada’s largest airline, the country’s flag carrier and a founding member of Star Alliance, the world’s most comprehensive air transportation network. Headquartered in Montréal, Air Canada provides scheduled service directly to more than 180 airports in Canada, the United States and Internationally on six continents. It holds a Four-Star ranking from Skytrax. Air Canada’s Aeroplan program is Canada’s premier travel loyalty program, with more than 10 million members worldwide. Members can earn or redeem points on the world’s largest airline partner network of more than 50 airlines, plus through an extensive range of merchandise, hotel and car rental partners.