by Natasha Lair
Last updated: 11:25 AM ET, Thu August 13, 2026
Air Canada is reporting record second-quarter revenue for 2026, with premium and corporate travel among the bright spots.
The airline reported operating revenues of CAD$6.266 billion during the quarter, an increase of $634 million compared with the same period last year. Adjusted EBITDA came in at $719 million.
The results offer an encouraging snapshot of travel demand heading through the busy summer season, particularly at the higher end of the market.
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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, including continued strength in premium and corporate travel, as well as Sixth Freedom traffic,” said Michael Rousseau, President and Chief Executive Officer.
"Capacity increased 0.3 per cent year over year, 0.2 percentage points below the lower end of our second quarter guidance mainly due to weather-related disruptions that negatively affected flight completion rates in the latter part of the quarter. Adjusted EBITDA 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. The performance in the quarter reflected the benefits of our diversified sources of revenue, the effectiveness of our pricing actions, and our continued focus on controllable cost execution. It especially underscores the dedication and professionalism of our employees, whom I thank for their unwavering commitment to serving our customers with excellence."
Record Revenue, But Costs Take a Bite
While the top-line numbers were strong, Air Canada also faced significantly higher expenses.
Operating expenses reached $6.481 billion, contributing to an operating loss of $215 million and a net loss of $178 million. The quarter included $388 million in labour-related and other charges. Adjusted net income was $114 million, or $0.40 per diluted share.
Fuel was another major factor, with expense climbing 49% year over year.
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“Cash generation and balance sheet strength remain key anchors of Air Canada’s financial foundation. In the quarter, we generated $651 million in net cash flows from operating activities and $174 million in free cash flow, fuelling our ability to invest in the business and return capital to shareholders. In the quarter, we deployed $125 million for share repurchases and maintained our leverage ratio at 1.7,” said Rousseau.
Air Canada Reinstates 2026 Outlook
The carrier also reinstated its full-year financial guidance after suspending it on April 30, although the updated outlook is more conservative than its previous forecast.
Air Canada now expects adjusted EBITDA of between $2.9 billion and $3.2 billion for 2026, compared with its previous forecast of $3.35 billion to $3.75 billion.
Capacity is expected to increase between 2.25 and 3.25% compared with 2025, down from the previously forecast 3.5 to 5.5 per cent increase. Free cash flow is now forecast at $200 million to $500 million, versus the earlier $400 million to $800 million range.
The revised outlook comes as Air Canada navigates volatile fuel prices. For its guidance, the carrier assumes jet fuel will average approximately $1.38 per litre in Q3 and $1.29 per litre in Q4. The airline says it expects to offset approximately 60 per cent of estimated incremental fuel expense in Q3 and 100 per cent in Q4 through measures that include expected hedging gains.
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Still, Rousseau pointed to continued demand for premium and corporate travel as a reason for confidence heading into the remainder of the year.
“Looking ahead, we are reinstating and updating full-year 2026 guidance, supported by resilient demand for premium and corporate travel, our fare actions to mitigate fuel-price volatility and our disciplined cost management. Reflecting the progress we have made in strengthening our financial position, we believe an investment grade rating is achievable in the mid-term. Beyond 2026, with Anko van der Werff announced as my successor, I am confident Air Canada has leadership continuity, a clear strategy and the financial strength to continue driving its long-term objectives and create significant sustainable value for all stakeholders,” Rousseau said in a statment.
For Canada's travel trade, the demand story may be the most notable takeaway.
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