EarningsQ3 2026 Earnings Report
DE:ADH2 Q3 2026 EPS Results
Actual EPS€0.48
Consensus EPS€0.31
Beat/MissBeat by +€0.17
One Year Ago EPS€0.48
DE:ADH2 Q3 2026 Revenue Results
Actual Revenue€4.46B
Expected Revenue€4.39B
Beat/MissBeat by +€73.14M
YoY Revenue Growth+20.96%
Earnings Announcement Details
QuarterQ3 2026
Date10/29/2026
TimeAfter Close
Conference CallThursday, October 29, 2026
DE:ADH2 Upcoming Earnings
Air Canada's next earnings date is estimated for February 12, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
DE:ADH2 Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was broadly positive, with record revenue, strong premium, corporate, cargo, and Sixth Freedom performance, resilient demand, a strong balance sheet, successful share repurchases, and continued fleet and commercial investment. The principal challenges were sharply higher fuel costs, lower fuel-cost recovery, reduced EBITDA and free-cash-flow guidance, moderated market demand growth, and planned capacity reductions. Management remained confident in the airline's commercial model and long-term strategy despite these near-term pressures.Company Guidance
Record Third-Quarter Revenue and Strong Operating Performance
Third-quarter operating revenues and passenger revenues both reached records of $7 billion and $6.3 billion, respectively, increasing 21% year-over-year. Capacity increased almost 6%, load factor reached 89%, up nearly 3 percentage points, and yields increased 11% year-over-year. Total and passenger unit revenues each increased 14% year-over-year, and every month of the quarter generated passenger revenue above $2 billion for the first time in Air Canada's history.
Adjusted EBITDA Held Essentially Flat Despite Higher Fuel Costs
Adjusted EBITDA was $936 million, essentially in line with last year, despite absorbing $906 million of higher fuel costs driven by a 68% year-over-year increase in fuel prices.
Premium and Corporate Revenue Growth
Premium cabin revenues increased 19% year-over-year, while corporate revenues increased 22% year-over-year in the third quarter. Corporate revenue continued to evolve favorably into the fourth quarter, with growth remaining in the double digits.
Strong Sixth Freedom Revenue Growth
Sixth Freedom revenues increased 16% year-over-year in the third quarter, driven by stronger performance on Pacific and Latin America corridors. Fourth-quarter Sixth Freedom revenue was tracking closer to 20% above the prior year, with further acceleration expected in the first quarter.
Cargo Revenue and Demand Momentum
Cargo revenues increased 33% year-over-year, driven by higher yields and favorable freight pricing. Management expected the strongest October on record for the cargo business, followed by similarly strong November performance, and said cargo's close-in booking curve enables recapture of almost 100% of incremental fuel costs.
Aeroplan Partner Billings Continued to Grow
Year-to-date third-party Aeroplan gross billings totaled $1.6 billion, an 11.5% increase year-over-year. Other revenues also increased 11%, supported by higher Air Canada Vacations ground package revenues and higher Aeroplan non-air revenues.
Resilient Demand and International Network Performance
Winter demand remained resilient across most geographies, despite some pressure in the domestic market. Early Air Canada Vacations bookings in some markets were outpacing capacity growth and generating stronger revenues, while new international routes were booking well. Management also reported excellent third-quarter transborder results, with solid revenue growth, yields, and Sixth Freedom performance.
A321XLR Efficiency and Fleet Investment
The Airbus A321XLR was performing well, with fuel burn per available seat mile below comparable wide-body aircraft and a more favorable margin profile on comparable routes. On a comparable transatlantic stage, the aircraft was burning roughly 15% to 20% less fuel per ASM than a comparable wide-body. Fourth-quarter deliveries were scheduled to include 6 A321XLRs, 2 787-10s, and 7 A220s.
Balance Sheet Strength and Debt Reduction
Air Canada ended the quarter with net leverage of 1.3x, below its target of 2x or less, and liquidity of $8 billion, equal to 32% of trailing 12-month revenues. The company used proceeds from the Aeroplan transaction to repay a USD 1.2 billion bond maturity and reported no material corporate debt maturities until April 2028.
Share Repurchases Reduced the Share Count
Air Canada completed an $800 million substantial issuer bid in September, reducing shares outstanding by approximately 10% to 252.7 million as of September 30, 2026. Management said this was the lowest share count since 2009 and below its 2028 target of under 300 million shares, achieved two years ahead of schedule. The company planned to renew its NCIB program in November and remain opportunistic with repurchases.
Positive Year-to-Date Free Cash Flow
Although third-quarter free cash flow usage was $440 million, year-to-date free cash flow was positive at $1.3 billion, including approximately $500 million from sale-and-leaseback transactions. The company continued to assume approximately $1 billion of sale-and-leaseback transactions in 2026, supported by signed definitive agreements.
Operational Recognition and Employee Execution
Management credited employees for delivering safe, consistent, and caring service during a very busy summer period. Air Canada was recognized as the best airline in North America at the 2026 Skytrax World Airline Awards, the tenth time it had received the honor since 2010.
Commercial and Customer-Offering Initiatives
Air Canada added more preferred seats on high-density 777 aircraft, launched branded fares and premium cabins, unveiled its summer 2027 routes, and launched Embarq, a platform for small- and medium-sized businesses. Management also highlighted continued investment in the fleet, network, customer experience, and employees.
Long-Term Capacity and Cost Strategy
Despite planning for elevated fuel prices, management continued to expect a return to pre-pandemic capacity levels over time. It stated that fleet renewal and scale benefits should support decelerating year-over-year CASM growth, including at lower capacity-growth rates.
DE:ADH2 Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed