by Natasha Lair
Last updated: 8:00 AM ET, Fri February 13, 2026
Air Canada reported fourth-quarter operating revenues of $5.770 billion and operating income of $324 million for the period ended December 31, 2025. Net income for the quarter was $296 million, or $1.00 per diluted share.
For the full year 2025, the airline reported operating revenues of $22.372 billion, operating income of $918 million and net income of $644 million. Adjusted EBITDA for the year totalled $3.124 billion, while free cash flow reached $747 million.
“Air Canada finished 2025 with a solid fourth quarter, delivering record revenues of $5.8 billion and achieving strong year-over-year earnings growth. For the full year, we generated $918 million in operating income and $3.1 billion in adjusted EBITDA,” said Michael Rousseau, President and Chief Executive of Air Canada.
“These results reflect our disciplined actions throughout the year, the strength of our commercial strategy, the loyalty of our customers, and—above all—the dedication and professionalism of our employees. I want to sincerely thank them for their hard work through a demanding year and through the severe cold and record snowfall of recent storms.”
Rousseau said the airline managed shifting demand trends, a summer labour disruption and ongoing macroeconomic and geopolitical uncertainty while maintaining operational reliability and advancing cost-reduction initiatives.
“We delivered these results while effectively managing shifting demand trends, a labour disruption in the summer, and continued macroeconomic and geopolitical uncertainty.
“We maintained our focus on operational reliability, advanced our cost-reduction initiatives, and generated solid free cash flow, reinforcing the resilience of our business model and supporting disciplined capital allocation, including meaningful share repurchases.”
Air Canada Full Year 2025 Results (Photo Credit: Air Canada)
Fourth Quarter Snapshot
In the fourth quarter of 2025:
- Operating revenues: $5.770 billion
- Operating expenses: $5.446 billion
- Operating income: $324 million (5.6% operating margin)
- Adjusted EBITDA: $867 million (15.0% adjusted EBITDA margin)
- Net income: $296 million
- Adjusted earnings per diluted share: $0.65
- Free cash flow: negative $478 million
Adjusted CASM (cost per available seat mile, excluding certain items) was 15.34 cents, up from 15.05 cents in the same quarter of 2024. Capacity, measured in ASMs, increased 3.4% year-over-year in the quarter.
Full-Year Performance
For the full year 2025:
- Operating revenues: $22.372 billion
- Operating expenses: $21.454 billion
- Operating income: $918 million (4.1% operating margin)
- Adjusted EBITDA: $3.124 billion (14.0% margin)
- Net income: $644 million
- Adjusted net income: $471 million
- Free cash flow: $747 million
Net cash flows from operating activities totalled $3.657 billion.
At year end, long-term debt and lease liabilities, including the current portion, stood at $11.576 billion. Net debt was $5.411 billion, resulting in a leverage ratio of 1.7x, compared to 1.4x at the end of 2024.
2026 Outlook
For the first quarter of 2026, Air Canada plans to increase its operated capacity by about 2.5% compared to the first quarter of 2025.
For the full year 2026, the airline provided the following guidance:
- Adjusted EBITDA: $3.35 billion to $3.75 billion
- ASM capacity growth: 3.5% to 5.5% versus 2025
- Adjusted CASM: 15.05 to 15.35 cents
- Free cash flow: $400 million to $800 million
The guidance assumes modest Canadian GDP growth in 2026, an average exchange rate of C$1.36 per U.S. dollar and an average jet fuel price of C$0.90 per litre.
Air Canada has also entered into non-binding letters for up to $2 billion in sale and leaseback transactions expected to close in 2026 and 2027. For guidance purposes, the airline assumes execution of $1 billion in sale-leaseback transactions in 2026.
“As we look ahead to 2026, we are encouraged by the strong momentum in bookings and the opportunities created by our next phase of fleet investments. At the same time, we remain sharply focused on cost management, productivity, cash generation, and preserving balance-sheet flexibility. Air Canada enters 2026 from a position of strength, and we remain committed to creating sustained value for our customers, employees, and shareholders,” said Rousseau.
Long-Term Targets
Air Canada reiterated its long-term financial targets first announced in December 2024.
By 2028, the airline is targeting operating revenues of approximately $30 billion and an adjusted EBITDA margin of at least 17%. By 2030, it aspires to exceed $30 billion in revenue and achieve an adjusted EBITDA margin of 18-20%.
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