Air Canada reported a CAD 500 million to CAD 600 million fuel headwind in the second quarter of 2026 after prices jumped from roughly CAD 0.90 per litre at the time of ticket booking to about CAD 1.40 per litre at service delivery. Approximately half of Q2 revenue had already been booked when the surge hit, according to CFO John Di Bert, who said the airline expects full fuel-cost recovery by Q4 2026.
At the CIBC Eastern Institutional Investor Conference on September 24, 2026, management reaffirmed a normalized core margin target of about 15% for the full year, adjusted for the one-time fuel impact and prior-year labor disruption. The roadmap calls for further expansion to 17% and eventually 18%, with 2027 expected to deliver the next leg of improvement. Cost per available seat mile is projected to grow below CPI over time.
Air Canada's pro forma leverage stands at roughly 1.2x after Q2, and the carrier has repurchased CAD 2.4 billion in shares since the end of 2024, including an CAD 800 million substantial issuer bid. Management said the outstanding share count — approximately 370 million — should fall toward pre-pandemic levels of about 260 million.
On the fleet side, Air Canada expects 18 Airbus A220s to arrive within the next twelve months, bringing the A220 fleet to around 65 aircraft. The A220 carries roughly 130 passengers at seat costs comparable to a Boeing 737 or Airbus A320, making it suitable for the airline's "sixth freedom" expansion strategy, which aims to double its share of the U.S. international market from about 1% to 2% — potentially reaching 3.5 million additional customers in cities such as St. Louis, Cincinnati, and Raleigh, North Carolina. The airline also introduced the Boeing 787-10 and Airbus A321XLR for long-haul routes; new aircraft burn approximately 20% less fuel. Belly-freight capacity is targeted to rise 20% to 25% over the coming years, supported by six direct freighter aircraft.
Capacity could be trimmed by one to two percentage points in Q4 2026, with further adjustments possible heading into Q1 2027. Trans-border demand recovered after a 25% post-Labor-Day drop last year, while Pacific routes remained softer due to Russian overflight restrictions. Capacity shifted away from U.S. sun destinations such as Arizona, Orlando, and Las Vegas toward Caribbean resorts including Cancun and Punta Cana.
Air Canada's Aeroplan loyalty program was sold as a minority stake at a valuation of 21 times trailing twelve-month EBITDA. About 8% to 10% of Canadian consumer spending flows through Aeroplan, whose co-brand credit cards form Canada's largest credit card platform; a small-business card is being added. Cargo revenue reached approximately CAD 1 billion.
Air Canada's shares closed at CAD 28.17 on September 22, reflecting a 50% gain over the past year and a 53% surge in the last six months, with a trailing P/E of 19x.
