Air Canada beats Q3 profit estimates but cuts forecast on rising fuel prices

Air Canada

29/10/2026 20:39

Overview
Canada airline's Q3 revenue rose yr/yr, beating analyst expectations
Adjusted EPS for Q3 beat analyst expectations
Company completed C$800 mln share buyback, reducing shares outstanding by about 10%

Outlook
Air Canada lowers 2026 adjusted EBITDA forecast to C$2.4 bln-C$2.7 bln from C$2.9 bln-C$3.2 bln
Company now expects 2026 free cash flow to be break-even ± C$150 mln, down from C$200 mln-C$500 mln
Company says higher fuel prices are weighing on 2026 outlook

Result Drivers
PASSENGER AND CARGO DEMAND - Co said higher passenger load factor, increased yields and 33% growth in cargo revenues drove Q3 revenue growth
COST AND PRICING ACTIONS - Co said pricing, capacity and cost measures helped offset higher fuel expenses
FUEL PRICE PRESSURE - Co said higher fuel prices are expected to weigh on results for remainder of yr

Company press release: ID:nGNX5BDW2D

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Beat
C$6.98 bln
C$6.88 bln (13 Analysts)
Q3 Adjusted EPS
Beat
C$0.75
C$0.53 (13 Analysts)
Q3 EPS
 
C$0.49
 
Q3 Net Income
 
C$139 mln
 
Q3 Operating Margin
 
3.70%
 

Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the airlines peer group is "buy"
Wall Street's median 12-month price target for Air Canada is C$34.00, about 55.8% above its October 28 closing price of C$21.82
The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 15 three months ago

Reuters Recommended Reads
Oct 28 - Canadian competition watchdog warns Air Canada-United deal could raise airfares
Oct 28 - As Iran war drags on, airlines pull back on fuel hedges and warn on fares
Oct 29 - India's IndiGo says fare increases inevitable as fuel costs rise

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)