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Q4 Revenue: $5.8 billion, up nearly 7% year-over-year. Q4 Adjusted EBITDA: $867 million, a 25% increase from last year. Full Year Revenue 2025: $22.4 billion, a 1% increase from 2024. Full Year Adjusted EBITDA 2025: $3.1 billion, exceeding guidance. Liquidity: $7.5 billion. Net Leverage: 1.7x. Free Cash Flow: $747 million. Shareholder Returns: Over $850 million returned through share repurchases in 2025. Q4 Passenger Revenue: $5 billion with a load factor of 85%. Full Year Cargo Revenue 2025: Surpassed $1 billion. Premium Revenue Growth: Increased 2% year-over-year. 2025 Cost Reduction: $150 million in cost reduction programs executed. 2026 Capacity Growth Expectation: 3.5% to 5.5% increase from 2025. 2026 Adjusted EBITDA Guidance: Between $3.35 billion and $3.75 billion. 2026 Free Cash Flow Guidance: Between $400 million and $800 million.

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Release Date: February 13, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Air Canada (ACDVF) reported a strong Q4 2025 with revenues reaching $5.8 billion, up nearly 7% year-over-year. The company achieved a record Q4 adjusted EBITDA of $867 million, a 25% increase from the previous year. Air Canada (ACDVF) maintained a solid balance sheet with $7.5 billion in liquidity and a net leverage of 1.7x. The airline returned more than $850 million to shareholders through share repurchases in 2025. Air Canada (ACDVF) was voted the best airline in North America at the 2025 Skytrax World Airline Awards, along with wins in 8 tail categories.

Negative Points

Air Canada (ACDVF) faced cost pressures due to labor agreements and depreciation, impacting adjusted CASM. The company anticipates a challenging 2026 with cost pressures from fleet deliveries and labor agreements. There is a potential impact on unit costs due to the transition of the Rouge fleet and planned aircraft retirements. Air Canada (ACDVF) expects depreciation to be a headwind for the next few years, impacting cost structure. The company faces competitive pressures in certain domestic markets, although it has less exposure to these areas.

Q & A Highlights

Q: Can you explain the strategic rationale behind the A350 order and how it fits into Air Canada's strategy? Are you focusing on operational efficiency in existing markets or expanding into new ones? A: The A350 offers significant flexibility and range capability, allowing us to expand into new markets such as the Indian subcontinent, Southeast Asia, and Australia, while also improving efficiency on existing routes. The aircraft's range is a key factor, benefiting both passenger and cargo operations.

Story Continues

Q: How are load factors and yields trending early in 2026, and what are your expectations for the rest of the year? A: We are seeing a constructive environment for the first half of 2026, with gains in both load factors and yields, particularly in international markets like the Atlantic. In the Pacific, load factors are growing with stable yields, and we expect this trend to continue through the first half of the year.

Q: What is Air Canada's approach to fuel procurement, and how does it impact your cost assumptions? A: We have a diversified fuel procurement strategy, with about 50% of our fuel sourced from New York Harbor and strong procurement in Asia. Our current fuel cost assumption is slightly below $0.90 per liter, and we have hedged nearly 20% of our first-half fuel needs at prices in the low 80s, reflecting the current environment well.

Q: Can you provide more details on Air Canada's capacity outlook for later in the year and where you see growth opportunities? A: We see significant growth opportunities in the North Atlantic and are strategically expanding in Asia and Latin America. We are building a Sixth Freedom franchise from Europe to Latin America via our hubs and will leverage new aircraft to double down on these opportunities.

Q: How is the Aeroplan program performing, and what impact do recent changes have on its growth and profitability? A: Aeroplan had a strong 2025, reaching over 10 million active members, up from 4 million when we acquired it. Gross billings and credit card spend are growing in the high single digits. The new revenue-based accrual program is showing strong initial metrics, with increased member status qualifications and higher average fares and purchase volumes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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