Air Canada is upgraded from sell to buy, with a new price target of US$18.31. Q3 earnings were significantly impacted by a labor strike, higher costs, and weak US Transborder business, but ACDVF's underlying performance remains resilient. Updated guidance shows stable EBITDA and improved free cash flow expectations, reflecting solid management despite ongoing labor and CapEx pressures.
Air Canada (TSX:AC.B) reported third quarter financial results below analyst expectations as the airline faced the impact of a labor disruption and softer international travel demand. The company reported operating revenues of C$5.774 billion for the quarter ended September 30, 2025, a 5% decline from a year earlier and below the Wall Street consensus estimate of about C$5.83 billion.
The airline is riding a rebound in premium and international travel to move past the fallout from its recent labor disruption that impacted third-quarter results.
| Passenger Airlines Industry | Industrials Sector | Mr. Michael Stewart Rousseau CPA CEO | OTCQX Exchange | CA0089118776 ISIN |
| Canada Country | 37,100 Employees | - Last Dividend | - Last Split | - IPO Date |
Air Canada, with its headquarters located in Saint-Laurent, Canada, is a major airline providing comprehensive air travel services. With operations kicking off in 1937, Air Canada has established itself as a leading provider of domestic, U.S. transborder, and international airline services, majorly under the Air Canada Vacations and Air Canada Rouge brands. The airline caters to various markets, including the Canadian market, the Canada-U.S. transborder market, and the international market to and from Canada. As of the end of 2023, Air Canada operates a sizable and diverse fleet, which includes 203 aircraft under the Air Canada brand and an additional 158 aircraft under its Air Canada Express and Air Canada Rouge banners, totaling 361 aircraft. This extensive fleet enables Air Canada to offer its passengers a wide range of travel options and destinations.
Air Canada has developed and provided an array of products and services tailored to meet the diverse needs of its customers. These offerings range from passenger services to cargo transport and vacation packages, demonstrating Air Canada's commitment to offering comprehensive travel solutions.
Air Canada operates scheduled passenger flights under its mainline and Air Canada Rouge brand, serving the Canadian market, the U.S. transborder market, and the international market. The service portfolio includes flights operated through capacity purchase agreements on other regional carriers, ensuring a wide-reaching network.
The airline provides dedicated air cargo services across approximately 50 countries, connecting major hubs such as Toronto, Miami, Quito, Lima, and Madrid. These services cater to the needs of businesses for reliable cargo transport solutions.
Through Air Canada Vacations, the company offers vacation travel packages to destinations across the Caribbean, Mexico, the United States, Europe, Central and South America, South Pacific, Australia, and Asia. These packages often include cruise options in North America, Europe, and the Caribbean, providing comprehensive vacation solutions to travelers.
Air Canada also provides travel loyalty programs, designed to reward frequent travelers with benefits and incentives, enhancing the value proposition for its customers and encouraging repeated business.