Air Canada has published its quarterly results, and its performance has been affected by a drop in bookings.
The Canadian flag carrier says that bookings towards the United States are declining, with drops just above 10%.
Air Canada’s drop in demand for the United States shouldn’t necessarily be a shock, considering the political tensions that have ensued since the beginning of 2025 and the change in administration.
The flag carrier published lower first-quarter revenue results than forecasted and adjusted its profit forecast as demand continues to drop, impacting its long-term approach.
While there remain drops, one of the biggest challenges is the uncertainty across the business in predicting what will occur, not just every month but even daily.
Customers’ reasons for not flying to the United States vary greatly; however, the airline undoubtedly sees an element of boycotting from Canadians toward the U.S., which extends as far as products.
Results For Air Canada
Overall, Air Canada reported a loss of CA$102 million for the first quarter of 2025, despite operating revenue remaining steady at CA$5.196 billion, just a 1% reduction year over year.
Air Canada did see operating expenses rise by some 2%, equating to CA$89 million. The cost increase remains a persistent challenge across the industry as airlines find ways to mitigate it and still record profits.
Our first quarter 2025 results show the airline is effectively managing through a turbulent period. Total operating revenues of nearly $5.2 billion were stable year-over-year on similar capacity. Our revenue diversification strategy remains sound; sixth freedom revenues grew, and Air Canada Cargo and Air Canada Vacations delivered solid results in the period.
Michael Rousseau, President and Chief Executive Officer of Air Canada.
Unfortunately, uncertainty on fuel prices, let alone how demand will fare in some of its most important markets, meant the airline posted results that were not what it may have initially forecasted.
Other areas, such as the prices of aircraft parts and key planes, are another cause of concern, as the tariffs placed on the country have only increased the overall prices placed on companies such as the airline.
Looking ahead, Air Canada hopes that its operating revenues will reach around 30 billion by 2028 and then exceed 30 billion beyond 2030.
Overall, the flag carrier is intensely focused on growth. Still, challenges in the operating environment make it hard to achieve the results that the company would ideally like to make happen.
ABOUT THE AUTHOR
Daniel Fowkes is a Melbourne-based aviation analyst and journalist with over a decade of industry experience. As founder of Dj’s Aviation, he delivers trusted analysis on aircraft, airline strategy and global aviation trends for djsaviation.net
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Get rid of govt involvement in the airline industry — landing fees, airport improvement fees and security charges. The govt is stealing from the airline industry to prop up other areas of govt.
I hope they go bust
Another reason for not using sir Canada is the transit visa requirement ,which is tuning people away from using the services
Why not fly from Melbourne rather then having to fly to Sydney to connect?
The arrogance at which this airline operates will never allow them to achieve success on a grand level like other global world carriers. Until they stop the top down management style and rid themselves of excessive upper management and entitlement amongst employees, the frontline team will have little confidence in taking care of the customer FIRST or EVER achieving any level of status among global carriers. You just have to look at the JD Powers recent survey of North American travelers. AIR CANADA was at the very bottom of the list. In econ9my and premium economy service right beside Westjet. Canadians get the worst airline service in North America from both these dismal airlines. Air Canada has so much work to do on a customer service level, yet upper management seem to believe they’re the best airline on earth. Clearly there are a few managers who are totally delusional.
Spread your wings to other destinations.
Not to mention they arn’t the most well liked airline either, they’ve helped make the mess, they can help clean it up.
So Air Canada cancelled a non stop business class flight flight
Adjustment…no you cancelled, and rebooked on a multi stop flight that included a commuter leg….3 hours longer to get to Vancouver!. Not the way to win customers!
Two more things hurt air canada revenues there constant ranking near the bottom for customer service and there ticket pricing especially for domestic flights .
This may not have anything to do with the topic, but I’m just curious. Is Air Canada beginning to move away from Boeing aircraft?
It is time Air Canada returned to it roots. Why does’nt resume seŕvice for many cities in Canada.
For example, Saint John (YSJ), where there is a single daily flight to Montreal and Toronto.
Maybe allowing passengers to get decent fares in Canada, especially would allow them to have more frequent flights within our country. Right now, a senior unfixed income cannot afford to visit family. Let’s say from British Columbia flying to Montreal..
Hi Daniel,
Going through the news today and came across this article you wrote about Air Canada’s struggles and how the flag carrier of our country is struggling. I get it that because of the traffis uncertainty and fuel, parts costing more , the airline is losing money but another key aspect of their business is customer service and I’m sorry to say I will never ever travel with this airline because of the way they treated me. I’m sure I’m not the only one who has nothing good to say about their customer handling tactics. Wish them all the best.
I am using Air Canada but if you want more bookings stop with bag charging, seat charging ect. Lower a bit your overpriced flights and you will see.
Maybe if they focused on customer satifaction they may retain a few customers.
Air Canada’s motto currently seems to be… we are not happy until you’re not happy.
Air canada only need to looknat their awful customer service to find out why they’re struggling. Good riddance…they don’t deserve to carry the flag for Canada. I have been so badly treated by them I always look for alternative airlines first when i book a flight.
Crappy seats, no padding worth talking about. Cramped accommodations and hardly any service unless one pays extra but airfare keeps increasing