Air Canada has announced its estimated financial results for Q3 2025, adjusting its guidance for the entire year in light of the recent strike involving its flight attendants, represented by the Canadian Union of Public Employees (CUPE). The strike, which saw over 3,200 flights canceled, has led to a forecasted decline in both capacity and earnings compared to 2024.
Third Quarter Financial Overview: Impacts of Labor Disruption
For the third quarter ending September 30, Air Canada projects a 2% decrease in operated capacity relative to Q3 2024. This decline is primarily attributed to the labor disruption caused by CUPE, affecting customer travel plans significantly.
The airline anticipates operating income for Q3 to be between $250 million and $300 million, a substantial dip from the $1.040 billion reported in the same quarter last year. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is expected to fall between $950 million and $1 billion during this period.
Financial Toll of the Flight Attendant Strike
The financial repercussions of the labor strike in August are estimated to have impacted Air Canada by approximately $375 million in operating income and adjusted EBITDA. Revenues suffered a hit of around $430 million, mainly due to refunds to customers, compensation claims, and a drop in bookings in late summer.
While the airline managed to avoid $145 million in costs due to reduced fuel expenses from fewer flights, this was tempered by approximately $90 million in reimbursements and expenses incurred from customer claims related to the strike.
Revised Full Year 2025 Projections
In light of the recent disruptions, Air Canada has revised its full-year financial outlook for 2025. Previously projecting an EBITDA range of $3.2 billion to $3.6 billion, the airline now anticipates it will fall between $2.9 billion and $3.1 billion.
| Metric | Updated 2025 Guidance | Prior 2025 Guidance (Suspended on August 18, 2025) |
| Adjusted EBITDA* | $2.9 billion to $3.1 billion | $3.2 billion to $3.6 billion |
| ASM Capacity | 0.5% to 1.5% increase versus 2024 | 1% to 3% increase versus 2024 |
| Adjusted CASM* | 14.60 ¢ to 14.70 ¢ | 14.25 ¢ to 14.50 ¢ |
| Free Cash Flow* | -$50 million to $150 million | Break even +/- $200 million |
Moving Forward: Path to Labor Stability
With binding arbitration now in progress to settle unresolved wage issues with CUPE, Air Canada anticipates no further labor disruptions in the foreseeable future. This development aims to stabilize operations and restore customer confidence as the airline navigates through these challenging times.
For more information about Air Canada’s services and updates, visit their official website. Additionally, insights into the company’s operational challenges and strategies can be further explored through reputable platforms like Business Insider or Forbes.
