Robert Besser
14 May 2025

MONTREAL, Canada: Air Canada has cut its annual core profit forecast and missed first-quarter revenue estimates, citing a drop in U.S.-bound travel driven by trade tensions and a weaker Canadian dollar, the airline said this week.

Canada's largest carrier revised its adjusted EBITDA projection for the year to a range of C$3.2 billion (US$2.30 billion) to C$3.6 billion, down from its previous estimate of C$3.4 billion to C$3.8 billion.

The airline reported first-quarter revenue of C$5.19 billion, a one percent decline from last year and below analyst expectations of C$5.29 billion, according to LSEG data.

Air Canada attributed the decline in part to Canadians canceling trips to the U.S. following President Donald Trump's tariffs on Canadian goods and his controversial remarks suggesting the U.S. should annex Canada.

The airline stated that the reduction in U.S.-bound bookings mirrors an industry-wide decline of around 10 percent over the next six months.

Its operations were further impacted by severe winter storms in Eastern Canada and a runway closure at Toronto Pearson International Airport after a Delta Air Lines jet accident in February.

Air Canada aims for C$30 billion in operating revenue by 2028 despite ongoing challenges, including higher costs for aircraft parts as manufacturers pass on the impact of tariffs.

The airline posted a first-quarter adjusted loss of C$0.45 per share, wider than last year's C$0.27 but better than analysts' forecast of a C$0.54 per share loss.