Air Canada Reports Earnings Slump as U.S. Travel Falters
Geopolitical turbulence and a weak Canadian dollar drag on U.S. revenue as Air Canada shifts focus to Atlantic and Latin American markets.
Editorial Team (ET)July 30, 2025
Air Canada has reported a significant drop in its second-quarter earnings, a reflection of mounting pressures in what CEO Michael Rousseau described as a “challenging environment.” The country’s largest carrier posted a net income of $186 million for the quarter, a sharp decline from the $410 million it earned in the same period last year. On an adjusted basis, net income came in at $207 million, or 60 cents per diluted share, compared to 98 cents per share in the previous year. That figure also missed analysts’ expectations, which had forecasted an average of 72 cents per share according to LSEG Data & Analytics.
At the heart of the earnings decline was an 11 percent drop in revenue from transborder flights to the U.S., which the company attributed to a combination of geopolitical tensions and a weaker Canadian dollar. The U.S. market, once a key driver of growth for Air Canada, has turned into a liability as travelers reconsider cross-border travel amid economic uncertainty and currency volatility. Revenue from the U.S. segment slid to $961 million from $1.08 billion last year. Compounding the problem was a dip in performance from the Pacific routes, down 2.8 percent over the first six months of the year.
Still, it wasn’t all bad news. Passenger revenues reached $5.03 billion for the quarter, a 1 percent increase from the previous year despite only a 2.5 percent increase in capacity. Atlantic routes in particular outperformed, bringing in $1.64 billion, up from $1.56 billion. Latin American routes also contributed positively. Rousseau noted that the company has been “strategically redirecting capacity to high-demand markets” and successfully leveraging its premium offerings. This strategic pivot appears to be cushioning the blow from U.S. and Pacific losses.
