Air Canada Reports Third Quarter 2025 Financial Results

Core Insights - Air Canada reported solid third quarter financial and operational performance despite labor disruptions affecting customer service [3][4] - The company anticipates strong booking momentum for the fourth quarter and early indicators for the first quarter of 2026 [4] Financial Performance - Operating revenues for Q3 2025 were $5.774 billion, a decline of 5% compared to the previous year [7] - Operating income was $284 million with an operating margin of 4.9%, and adjusted EBITDA was $961 million with an adjusted EBITDA margin of 16.6% [15] - Net cash flows from operating activities were $813 million, and free cash flow was $211 million [7][15] Guidance and Outlook - For the full year 2025, Air Canada updated its guidance for adjusted EBITDA to between $2.95 billion and $3.05 billion [10] - The company expects a 0.75% increase in ASM capacity compared to 2024 and adjusted CASM to remain between 14.60¢ and 14.70¢ [10] - Free cash flow guidance has been revised to a range of $0 to $200 million, an improvement from the previous forecast of -$50 million to $150 million [10] Strategic Initiatives - Air Canada plans to focus on growth through strategic initiatives and the introduction of new efficient aircraft [5] - The company aims to improve its cost structure through productivity gains and operational efficiencies [5] - A normal course issuer bid (NCIB) has been announced, allowing the purchase of up to 29,557,428 shares to address shareholder dilution [13][14] Long-term Targets - Air Canada has set long-term financial targets for 2028, including operating revenues of approximately $30 billion and an adjusted EBITDA margin of at least 17% [21] - The company aspires to achieve a return on invested capital of at least 12% by 2030 [21]