Air Canada says fuel costs spiked 49% from last year, with travel demand up

Air Canada's second-quarter earnings revealed a significant 49 per cent jump in aircraft fuel expenses compared to the prior year. Despite this substantial cost increase, the airline managed to achieve record operating revenues, climbing 11 per cent year over year, driven by robust demand across its network. The company's adjusted EBITDA reached $719 million, meeting the upper end of its guidance range.

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Air Canada delivered record second-quarter operating revenues, up 11 per cent year over year, supported by strong demand across our network.

Fuel costs for the three months ending June 30, 2026, amounted to over $1.7 billion, a notable rise from nearly $1.15 billion in the same period last year. This surge in fuel expenses, exacerbated by global supply strains since the Iran war began, has led Air Canada to reinstate its full-year guidance but with lowered expectations. The airline now anticipates adjusted earnings before taxes to be between $2.9 and $3.2 billion for the full year, down from its previous forecast.

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Adjusted EBITDA [A measure of core business performance] reached $719 million, at the top end of our second quarter guidance range, despite a 49 per cent year-over-year increase in fuel expense.

Adding to its financial strategy, Air Canada announced it will sell a quarter of its Aeroplan loyalty program to Blackstone and La Caisse for $2.5 billion. The airline will maintain its 75 per cent ownership and complete control over the program's strategy, operations, and member experience. Executives emphasized that this transaction will not alter how members earn or redeem points, but will instead strengthen the company's balance sheet and move it closer to an investment-grade rating.

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Our new guide range reflects our original guide, less the hit, the headwind that we will have taken for what are effectively fares that were booked before the conflict occurred.