Air Canada announces Q2 profit of $186 million amid trying circumstances
Air Canada, Canada's largest airline, reported a decrease in net income for the second quarter of 2025. The airline's net income stood at $186 million, a significant drop from the $410 million reported in the same quarter of the previous year.
The decrease is attributed to rising operating expenses and an increase in the adjusted Cost per Available Seat Mile (CASM), which rose by 6.4% to $0.144. Despite a 2% growth in revenues to $5.632 billion, the higher costs pressured earnings and caused earnings per share (EPS) to miss expectations at $0.60 versus a forecast of $0.71.
In an effort to navigate macroeconomic uncertainties and geopolitical tensions, Air Canada has strategically redirected capacity to high-demand markets such as Transatlantic and Latin American routes. The airline has also continued to emphasize its premium services, cargo, vacation packages, and loyalty program Aeroplan, to diversify revenue sources.
Air Canada has maintained disciplined execution of its long-term commercial strategy while adapting operational plans to shifting market conditions. The airline achieved strong operational performance, leading North American carriers in on-time performance in May and June 2025, which supports customer satisfaction and competitive positioning.
Despite the earnings challenges, Air Canada reaffirmed its full-year adjusted EBITDA guidance of $3.2-$3.6 billion, indicating confidence in managing the ongoing external risks. Adjusted earnings for the quarter were 60 cents per diluted share, down from 98 cents per share in the same quarter of 2021.
The report was first published on July 29, 2025, by The Canadian Press.
[1] Air Canada Q2 2025 Earnings Release [2] Air Canada Q2 2025 Earnings Call Transcript [3] Air Canada Q2 2025 Earnings Analysis
- The decrease in Air Canada's net income for Q2 2025, largely due to increased operating expenses and the rise in CASM, has far-reaching implications for the airline industry's finance sector and overall transportation business.
- In response to macroeconomic uncertainties and geopolitical tensions, Air Canada has shifted focus to high-demand markets like Transatlantic and Latin America, aligning with the dynamic environment and adjusting strategically to changing market conditions.
- Air Canada's diversified revenue sources, including premium services, cargo, vacation packages, and the loyalty program Aeroplan, have been instrumental for the airline's adaptability and resilience in the evolving business landscape.
