MONTREAL – Air Canada is looking beyond the U.S. as Canadians continue to shun their neighbour amid the trade war, all as the company tries to bounce back from a costly summer strike.
The country’s largest airline has ramped up flights at home and in Europe, the Caribbean and Latin America in response to travellers’ renewed interest in domestic and overseas trips.
“We mitigated the exposure to reduced demand between Canada and the U.S. In Q3 we quickly responded to Canadians’ growing interest to travel domestically,” chief commercial officer Mark Galardo told analysts on a conference call Wednesday.
“Sun and Latin American markets remain solidly ahead of last year for winter, with a robust advanced booking position from Air Canada Vacations.”
“The transborder sector remains stable, albeit at lower levels,” he said of Canada-U.S. travel.
Air Canada said total capacity will nudge up this year, even as demand for flights to the U.S. remains weak.
The number of Canadians returning from the U.S. by air fell 27 per cent year-over-year in September, according to Statistics Canada, as a backlash to the tariff spat sparked by U.S. President Donald Trump continues. Meanwhile, the tally of Canadian residents returning from trips overseas rose four per cent — though not enough to offset the U.S. decline.
A second hurdle is in the rear-view mirror, leaving a dent in Air Canada’s income statement.
A three-day strike by more than 10,000 Air Canada flight attendants in August shut down operations and caused more than 3,000 flight cancellations.
The labour dispute cost the airline $375 million, prompting it to lower its adjusted earnings forecast for the year by about that amount, the company said earlier this fall. On Tuesday, it narrowed its adjusted earnings forecast to between $2.95 billion and $3.05 billion compared with the $2.9 billion to $3.1 billion it predicted in September.
Third-quarter revenue fell more than five per cent to $5.77 billion due to the strike, whose costs include $90 million in reimbursements to customers, chief financial officer John Di Bert said.
Air Canada also cut about 400 management jobs to lighten its cost load after the financial hit.
On Tuesday, Air Canada reported a profit of $264 million for the quarter ended Sept. 30, down from $2.04 billion during the same period a year earlier.
On an adjusted basis, the Montreal-based company reported third-quarter earnings of 75 cents per diluted share, down from $2.57 per diluted share in the same quarter last year and well below analysts’ expectations of 95 cents per share.
This report by The Canadian Press was first published Nov. 5, 2025.
Companies in this story: (TSX:AC)
