October 30, 2026 — Air Canada’s third-quarter revenue rose 21%, but the airline cut its full-year profit outlook because fuel costs have jumped. It now expects to recover only about 70% of the extra fuel cost through fares. Separately, its Dubai flights are off until the end of March 2027.
What happened
Air Canada reported its third-quarter 2026 results on October 29. Operating revenue was C$6.984 billion, up from C$5.774 billion a year earlier. Fuel costs rose by C$906 million, so operating income fell to C$261 million and the operating margin dropped to 3.7%. Planes were fuller than a year ago, with a passenger load factor of 89%.
| Q3 2026 | Result | Q3 2025 |
|---|---|---|
| Operating revenue | C$6.984 billion | C$5.774 billion |
| Operating income | C$261 million (3.7% margin) | C$284 million (4.9%) |
| Net income to shareholders | C$139 million | C$264 million |
| Capacity (ASMs) | Up 5.7% | — |
| Passenger load factor | 89% (up 2.6 points) | — |
| Cargo revenue | Up 33% | — |
Lower full-year outlook
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is now forecast at C$2.4–2.7 billion, down from C$2.9–3.2 billion.
- Full-year capacity is now about +2.75% versus 2025, narrowed from the earlier +2.25% to +3.25% range.
- Free cash flow is now expected to be roughly break-even (plus or minus C$150 million), down from C$200–500 million.
- For the fourth quarter, Air Canada assumes jet fuel at about C$1.72 per litre, up from C$1.29 earlier. It now expects to offset about 70% of the extra fuel cost, down from 100% before.
- The airline names the Middle East conflict and disruption through the Strait of Hormuz as risks to fuel prices.
Labour, fleet and shareholders
- New four-year collective agreements with the IAMAW and Unifor unions were concluded in 2026. Air Canada booked related pension past-service charges of C$131 million (IAMAW, Q3) and C$132 million (Unifor, Q2).
- Air Canada plans up to C$2 billion of sale-and-leaseback deals and had completed C$501 million by the end of September.
- A new share buyback covering up to 25,197,886 shares will run from November 9, 2026 to November 8, 2027.
Dubai off until spring
Time Out Dubai reported on October 29 that Air Canada has cancelled all Dubai flights until the end of March 2027. It is one of 16 international airlines on that publication’s list of carriers that have suspended Dubai service.
What it means for non-revs
- Flights were already very full. An 89% load factor in the third quarter leaves few spare seats on an average flight. Popular flights will often have none.
- Not much new capacity is coming. Full-year capacity growth is only about 2.75%, and expensive fuel pushes airlines to cut spare flying rather than add it. Don’t expect the winter schedule to open up many extra seats.
- Dubai is off the map until April. No Air Canada Dubai flights are scheduled until after the end of March 2027, so plan Middle East trips through partners, and check those partners’ own suspensions first.
- Labour is settled for now. The IAMAW and Unifor agreements run four years, so this report flags no near-term strike risk from those groups.
Sources
- Air Canada — “Air Canada Reports Third Quarter 2026 Financial Results” — aircanada.com
- FlightGlobal — “Air Canada cuts outlook as margins fall” — flightglobal.com
- Time Out Dubai — “These 16 airlines have suspended flights to Dubai” — timeoutdubai.com
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