Air Canada has scaled back its 2025 financial guidance following a difficult third quarter disrupted by a large-scale cabin crew strike. The airline, which had been navigating a post-pandemic recovery, now faces new headwinds as it seeks to restore operational stability and passenger confidence.
Labour Dispute hits Peak Travel Season
The strike by cabin crew union CUPE in August led to the cancellation of over 3,000 flights, impacting both domestic and international schedules during the critical summer travel window. Passengers faced delays, refunds, and re-bookings, while the airline scrambled to mitigate reputational fallout. Although the labour dispute has since moved to binding arbitration, the operational and financial effects were swift and severe.
Revised Outlook Reflects Caution
Air Canada has now revised its expectations for the remainder of 2025. While the airline stopped short of painting a bleak picture, it acknowledged that the disruption forced a rethink of capacity plans and cost forecasts. Executives pointed to continued strength in passenger demand but noted rising unit costs and lower-than-expected cash flow projections. The carrier is taking a more measured approach to network growth heading into the winter season.
Updated guidance now pegs full-year adjusted EBITDA between $2.9 billion and $3.1 billion, down from an earlier range of $3.2 billion to $3.6 billion. Capacity growth has been revised to 0.5% to 1.5%, while unit costs are expected to rise to 14.60 to 14.70 cents per seat mile. Free cash flow is projected between $50 million and $150 million, with the labour disruption estimated to have cost the airline $375 million.
Focus Shifts to Recovery and Stability
Despite the setback, Air Canada remains focused on long-term recovery. Management highlighted ongoing investments in fleet modernisation and digital infrastructure. However, rebuilding customer trust and avoiding further industrial unrest will be key as the airline looks to end the year on steadier ground. See more about Air Canada HERE.
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