The trade union action has led to the cancellation of over 3,200 flights

Air Canada disclosed estimated results for the third quarter (3Q) of 2025 and reinstated previously suspended full-year guidance, highlighting the significant financial and operational impact caused by the cabin crew strike in August 2025, represented by the Canadian Union of Public Employees (CUPE). The airline estimated operating income and adjusted EBITDA losses of CAD 375 million as a result of the work stoppage, which forced the company to cancel more than 3,200 flights. Most of this amount stems from an estimated revenue reduction of CAD 430 million, primarily attributable to refunds and compensation paid to customers, as well as a decline in new bookings between August and early September.

Despite the crisis, the carrier partially mitigated the losses by avoiding CAD 145 million in operating costs, mainly due to lower fuel consumption. However, this reduction was offset by approximately CAD 90 million of incremental costs incurred to reimburse passengers for out-of-pocket expenses and other operating costs related to the labour action.

Revised forecasts and outlook

Due to the disruption, the company expects operating capacity to be down about 2% in the quarter ended September 30, 2025 versus the same period a year earlier. Operating income for the third quarter of 2025 is estimated between CAD 250 million and CAD 300 million, and adjusted EBITDA between CAD 950 million and CAD 1 billion. This represents a sharp decline compared with operating income of CAD 1.04 billion recorded in the third quarter of 2024. It is important to note that the 2025 estimate includes approximately CAD 175 million of one-time charges related to non-cash pension plan changes and other employee-related charges.

Air Canada has reinstated and updated its full-year 2025 financial guidance to reflect these effects.

Agreement and arbitration ongoing

The strike, which involved about 10,000 flight attendants and completely halted the carrier’s operations for several days in mid‑August, ended with a tentative four‑year agreement. However, the pay component remains subject to arbitration between Air Canada and CUPE. The airline has assured that neither party will be able to initiate new work stoppages during the arbitration process or for the duration of the new agreement. The carrier expressed deep regret for the disruption caused to travellers, stating that it has already resolved more than 60,000 claims.