Air Canada lowers yearly profit forecast, cites economic uncertainty
May 9, 2025
Although Air Canada CEO and president Michael Rosseau said that its Q1 results were indicative of the flag carrier “effectively managing through a turbulent period,” the ongoing uncertainty surrounding market conditions (particularly regarding flights to and from the US) has led Air Canada to “prudently” moderate its expectations.
Although the airline intends to increase its available seat mile (ASM) capacity between 2% and 2.5% year-on-year for Q2 205, it has updated its full year guidance in light of a market set to “remain unsteady with an uncertain economic outlook”. This includes an overall reduction in projected ASM increase, dropping from 3-5% to just 1%-3% versus 2024. Overall EBITDA expectations have also dropped by around $0.2 billion.
During Q1 2025, “significant capacity growth” experienced in the Pacific region in 2024 slowed, with “competitive pressures” on routes to the Middle East and Indian subcontinent also affecting passenger revenues. However, this decline was partially offset by higher traffic within domestic and Latin America. In total, US transborder flights experienced a 4.6% quarter-on-quarter loss in revenue, with load factor also down 2.2% on these services.
Although advance ticket sales ahead of the peak summer travel season grew $1 billion from the end of 2024 (aligning with expectations), “we are prudently moderating our expectations and concentrating on controllable factors such as cost management and strategic capacity adjustments to ensure strong performance in key markets,” concluded Rosseau.
