Air Canada delivers record Q1 revenue but suspends full-year outlook amid fuel uncertainty

Air Canada reported a strong start to 2026, posting record first-quarter revenues of $5.8 billion (+11% year-on-year) and operating income of $117 million, a $225 million improvement from 2025. Adjusted EBITDA reached a first-quarter high of $623 million (+61%), supported by robust demand across its network.

The airline generated significant cash, with $1.8 billion from operations and $1.6 billion in free cash flow, while also repurchasing over $140 million in shares—highlighting solid financial discipline and balance sheet management.

Despite the strong performance, Air Canada suspended its full-year 2026 guidance due to heightened volatility in jet fuel prices, driven by geopolitical instability, particularly in the Middle East. Instead, it issued second-quarter guidance, forecasting adjusted EBITDA between $575 million and $725 million and modest capacity growth of up to 1%.

The carrier expects to offset 50–60% of increased fuel costs through pricing and cost measures, assuming continued strong demand. However, uncertainty around fuel prices, global trade disruptions, and geopolitical risks remains a key concern.

Overall, Air Canada signals continued operational momentum and resilience but is adopting a cautious near-term outlook given external volatility.