Post by : Rameen Ariff

Air Canada is positioning for a testing 2026 as rising labour expenses and a pullback in U.S. leisure travel are expected to hit its financial performance. The carrier nonetheless intends to take delivery of 35 new aircraft to support its longer-term growth objectives.

Speaking with analysts on Wednesday, company leaders acknowledged the coming year will bring fiscal strain but said the airline remains focused on modernisation and operational resilience. The new jets should bring better fuel efficiency, lower unit costs and an upgraded customer experience across both domestic and international routes.

The airline is still recovering from recent disruptions. In the third quarter, profits fell after a cabin crew strike prompted the cancellation of thousands of flights, significantly affecting passenger flows and revenue during a peak travel period.

Adding to the pressure is a slowdown in leisure travel between Canada and the United States — a vital market for Air Canada. With travellers more cautious and U.S. carriers competing aggressively on price, transborder demand has softened relative to previous quarters.

Executives said tighter cost controls, smarter scheduling and the phased integration of new aircraft should help mitigate some 2026 pressures. The carrier is also exploring expanded opportunities in other international markets to offset weaker U.S. demand.

Air Canada shares fell nearly 3% in early Wednesday trading after the earnings release, reflecting investor concern about near-term profitability. Nonetheless, analysts say the fleet renewal and efficiency focus could support a stronger recovery by 2027.

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