by Natasha Lair
Last updated: 6:50 AM ET, Thu September 25, 2025
Air Canada has released preliminary estimates for its third-quarter 2025 results and updated its full-year guidance, citing the financial and operational impact of the August cabin crew strike led by the Canadian Union of Public Employees (CUPE).
For the quarter ending September 30, 2025, the airline expects operating income to be between $250 million and $300 million, including approximately $175 million in one-time, non-cash pension plan amendments and other labour-related charges.
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Adjusted EBITDA is forecast between $950 million and $1 billion. That compares to $1.040 billion in operating income and $1.523 billion in adjusted EBITDA in the same quarter last year.
Capacity for the quarter is expected to decline by about 2% year-over-year, primarily due to the cancellation of more than 3,200 flights in August.
Impact of Labour Disruption
Air Canada said the strike cost the company an estimated $375 million in operating income and adjusted EBITDA. The financial hit was attributed to three factors:
- $430 million in lost revenue, primarily from refunds, compensation, and lower bookings in August and early September.
- $145 million in avoided costs, largely from reduced fuel use.
- $90 million in incremental expenses related to customer reimbursements and labour costs.
“Air Canada deeply regrets the impact of the disruption on its customers and remains committed to resolving every claim submitted by affected customers quickly and accurately, having done so for more than 60,000 claims to date,” the airline said in a statement.
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The company confirmed it will proceed to arbitration with CUPE to finalize the wage portion of the four-year tentative agreement. During the arbitration process, no strike or lockout action can occur.
Updated 2025 Guidance
Air Canada has reinstated its full-year financial outlook, which was suspended in August. The updated forecast reflects the disruption’s impact:
- Adjusted EBITDA: $2.9 billion to $3.1 billion (previously $3.2 billion to $3.6 billion)
- ASM capacity: up 0.5% to 1.5% versus 2024 (previously 1% to 3%)
- Adjusted CASM: 14.60¢ to 14.70¢ (previously 14.25¢ to 14.50¢)
- Free cash flow: between -$50 million and $150 million (previously break even +/- $200 million)
The company also adjusted its assumptions, including an average Canadian dollar exchange rate of $1.39 per U.S. dollar and an average jet fuel price of $0.92 per litre for 2025.
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The carrier will publish its full Q3 results later this year.
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