What Happened to Air Canada?

Air Canada's journey began as Trans-Canada Air Lines (TCA) in 1937, established by the Canadian federal government to provide national air transportation. It was officially renamed Air Canada in 1965 and fully privatized by 1989, marking a significant shift from its Crown corporation status. A pivotal moment in its history was the acquisition of its largest rival, Canadian Airlines, in 2000, which consolidated the Canadian airline industry. However, the early 2000s brought financial turmoil, leading to bankruptcy protection in 2003, from which it emerged in 2004 under ACE Aviation Holdings.

Following the global challenges of the COVID-19 pandemic, Air Canada has demonstrated a strong recovery trajectory. In 2025, the airline reported record full-year operating revenues of $22.372 billion and a net income of $644 million, alongside an adjusted EBITDA of $3.124 billion, reflecting a solid rebound in travel demand. This performance was driven by disciplined actions, a strong commercial strategy, and diversified international demand, which helped offset a decline in Canada-U.S. travel demand in the latter half of 2025.

As of 2026, Air Canada continues its strategic expansion and modernization efforts. In May 2025, it announced its most extensive winter schedule expansion into Latin America and the Caribbean for the 2025-26 season, adding 13 new routes and four new destinations. Further international network expansion for Summer 2026 was announced in September and November 2025, including new routes to Catania, Palma de Mallorca, Shanghai, Budapest, Berlin, Nantes, Ponta Delgada, and Brussels, aiming to offer North America's second-largest transatlantic network by destinations. The airline is also heavily investing in fleet modernization, receiving its first Airbus A321XLR in May 2026, which will be used for transatlantic flights, and disclosing a firm order for eight Airbus A350-1000 aircraft in February 2026 to bolster its long-haul capabilities. A comprehensive cabin renewal program across its mainline, Rouge, and Express fleets was also announced in November 2025, including the transition of all Boeing 737 MAX 8 aircraft to Air Canada Rouge by the end of 2026.

Financially, Air Canada started 2026 strongly, reporting record first-quarter operating revenues of $5.8 billion, a significant 11% increase from Q1 2025. It also achieved a record adjusted EBITDA of $623 million, up 61% year-over-year, and a net income of $48 million. However, citing significant volatility and uncertainty in jet fuel prices due to geopolitical instability, Air Canada suspended its full-year 2026 financial guidance, providing only Q2 2026 guidance. This volatility has already led to the early suspension of several seasonal U.S. and domestic routes, including flights from Toronto to Sacramento and Charleston, Vancouver to Raleigh-Durham, and Montreal to Austin, with plans to resume them in Summer 2027.

In a notable leadership development, President and CEO Michael Rousseau announced in March 2026 that he would retire by the end of the third quarter of 2026. An external global search for his successor, with French language ability as a key criterion, was initiated in January 2026. Air Canada Cargo also achieved a significant milestone in 2025, surpassing $1 billion in revenue, driven by its freighter network strategy and increased digital bookings.