Air Canada said it spent 49 per cent more on aircraft fuel compared to a year ago while demand for air travel boosted its overall revenue.
At the same time, the company says it plans to sell a quarter of its Aeroplan loyalty program.
Full details were shared Tuesday in the air carrier’s earnings for its fiscal second quarter.
“Air Canada delivered record second-quarter operating revenues, up 11 per cent year over year, supported by strong demand across our network,” said Michael Rousseau, president and CEO of Air Canada, in a statement.
The report showed Air Canada’s fuel costs totalled just over $1.7 billion in the three months leading up to June 30, 2026, up from nearly $1.15 billion a year earlier.
Air Canada also reported its operating revenue topped $6.266 billion, up from $5.632 billion a year earlier, and the airline reinstated its full-year guidance after suspending it in the spring amid higher jet fuel costs and volatility.
The outlook includes lower expectations for the rest of 2026 than it had before suspending its guidance at the last earnings release.
Air Canada expects it will make adjusted earnings before taxes and other costs of between $2.9 and $3.2 billion for the full year, down from the last forecast of $3.35 billion to $3.75 billion, and fuel prices are part of the reason for that change.
Fuel prices worldwide have shot up since the Iran war began at the end of February, with global oil supplies strained as the Strait of Hormuz sees severe restrictions on cargo traffic amid threats of attacks by Iran. The strait normally sees about a fifth of the world’s crude oil supply, which is key to making refined products, including fuel for passenger planes and other vehicles.
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Members of Air Canada’s executive team answered questions from analysts in a conference call Wednesday morning.
“Our new guide range reflects our original guide, less the hit, the headwind that we will have taken for what are effectively fares that were booked before the conflict occurred,” said chief financial officer John Di Bert on the call.
“We bought fuel at prices that were higher than what the fares were sold.”
At its last earnings release on April 30, Air Canada announced it was cancelling several flight routes as jet fuel costs soared, and it suspended its full-year guidance for 2026, citing “volatility and uncertainty in relation to jet fuel prices for the second half of the year.”
Air Canada also announced it’s selling a 25 per cent investment stake in its Aeroplan loyalty program to Blackstone and La Caisse for $2.5 billion. Air Canada will retain the remaining 75 per cent, along with full control of the program.
Moshe Lander, professor of economics with Concordia University, says the program comes with liability. He explains that because there are potentially trillions of Aeroplan points accumulated worldwide by customers that have yet to be cashed in, that creates an element of financial risk.
“They’re transferring a portion of the risk, but increasingly then that group that’s buying it is going to have a say as to how the program works because they want to make sure that they get their money and they get the return as well,” he says.
“The likely outcome now is just those points are not going to stretch as far or the that you convert into dollars is going to be even less attractive to ensure that they are going to make money.”
Air Canada says there will not be changes to the program as a direct result of the transaction.
“Aeroplan remains a core part of Air Canada’s commercial strategy and we continue to retain full control of the program’s strategy, operations, partnerships and member experience while monetizing a portion of its underlying value. There is no intention of relinquishing control of this valuable and strategically important component of Air Canada,” Rosseau said Wednesday on the call with analysts.
“There will be no changes to the way members earn or burn points or to any other element of the program because of this transaction. This transaction simply further strengthens our balance sheet, creates value for all stakeholders, and is an important step on our path toward an investment-grade rating in the midterm.”
Lander says although there may be no immediate changes, as Air Canada says, there are likely going to be changes to Aeroplan eventually.
“There is going to be a change. Why would anybody want to buy into something where they know they’re for sure on the hook?” he says.
“They can constrain the program to make it unattractive or more difficult and effectively it just means that they’re pocketing the money that you paid thinking you’re getting the Aeroplan points that you’re not going to be able to use.”
Air Canada announced changes to how Aeroplan members can accumulate points in August 2025, which started on Jan. 1 of this year. It included eliminating the ability to earn points from miles flown and focusing purely on generating points from dollars spent on airfares and other charges.
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