Air Canada reported a 49 per cent rise in jet fuel expenses for the three months to 30 June 2026, even as passenger demand lifted operating revenue to a new high.
Fuel cost surge
The airline's fuel bill topped $1.7 billion, up from $1.15 billion a year earlier. Chief financial officer John Di Bert told analysts the company had purchased fuel at prices that exceeded the fares booked before the recent Middle East conflict drove global oil markets higher.
Despite the cost pressure, adjusted EBITDA reached $719 million, matching the top end of the guidance range. Michael Rousseau, president and CEO, said the carrier delivered record second‑quarter operating revenues, up 11 per cent year over year, thanks to strong demand across its network.
Air Canada reinstated its full‑year guidance after suspending it in the spring. The airline now projects adjusted earnings before taxes and other costs of $2.9 billion to $3.2 billion for 2026, a reduction from the previous $3.35 billion to $3.75 billion outlook, reflecting the impact of higher fuel prices.
Aeroplan stake sale
In a parallel move, the carrier agreed to sell a 25 per cent stake in its Aeroplan loyalty programme to private‑equity firm Blackstone and the Quebec pension fund manager La Caisse for $2.5 billion. Air Canada will retain the remaining 75 per cent and full control of the programme's strategy, operations and member experience.
Rousseau assured investors that the transaction will not alter how members earn or redeem points. He described the sale as a balance‑sheet strengthening measure that supports the airline's goal of achieving an investment‑grade credit rating in the mid‑term.
The Aeroplan changes announced earlier this year, which shifted point accrual from miles flown to dollars spent, remain in place. The sale therefore represents a financial manoeuvre rather than a shift in the loyalty model.
Higher jet fuel costs stem from the ongoing conflict in the Middle East, which has constrained supplies through the Strait of Hormuz, a chokepoint for roughly one‑fifth of the world's crude oil. The situation underscores the vulnerability of Canadian airlines to geopolitical shocks that affect global energy markets.
For Canadian travellers, the rise in fuel costs could translate into higher ticket prices if airlines choose to pass on the expense. For the broader economy, the infusion of $2.5 billion into Air Canada's balance sheet may help stabilise a sector that supports tourism, trade and employment across the country.
Based on reporting by Global News.