Investor Outlook: Air Canada profit hit by strike but premium travel lifts outlook

Investor Outlook: Air Canada Profit Impacted by Strike

Air Canada’s third-quarter earnings declined by five per cent following the summer flight attendant strike. The airline’s revenue fell year over year, and profits dropped significantly due to the disruption.

Analyst Perspective on Recovery

Despite these setbacks, analysts remain optimistic about Air Canada’s recovery prospects. They highlight the growing demand for premium and international travel, alongside fuel savings, as supporting factors.

"The impact is potentially more muted than some might have expected. That’s because if you’re only making a few per cent margin on the flights you do operate, when you don’t fly them you also save some costs."

— Nicolas Owens, equity analyst, industrials at Morningstar

Challenges and Strategic Focus

Nicolas Owens explained that higher labour costs and delayed aircraft deliveries could pressure margins in the near term. However, Air Canada’s commitment to improving efficiency and focusing on premium customers is expected to help balance these challenges.

Market Reaction

Air Canada shares remained mostly flat following the earnings report, reflecting cautious investor sentiment. The strike's effects, including compensation paid to stranded customers, may continue to be a near-term drag on financial results.

Summary

While the August strike temporarily hurt Air Canada’s earnings, sustained demand for premium travel and operational efficiency are seen as key drivers for its financial recovery.

Author’s summary: Air Canada’s earnings dropped due to a summer strike, but analysts expect strong premium travel demand and efficiency gains to fuel a rebound despite near-term challenges.

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BNN Bloomberg BNN Bloomberg — 2025-11-06

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