Air Canada is likely to withdraw its full-year 2026 EBITDA guidance when it reports first-quarter results on April 30, according to TD Cowen, part of Canadian financial firm TD Securities, which reiterated its Buy rating on the stock but cut its price target to C$21.00 from C$23.00.
The broker said it now expects Air Canada’s second-quarter available seat miles to rise 1.25% year on year, below the 3.2% consensus, and models Cost per Available Seat Mile (CASM) ex-fuel at C$15.34 cents, near the high end of the airline’s initial range. If the company does update its guidance rather than withdraw it, TD Cowen expects adjusted EBITDA of C$2.45 billion to C$2.85 billion for 2026.
Fuel remains the main swing factor. TD Cowen said management had indicated that about 25% of second-quarter fuel consumption is hedged, higher than the 8.5% level the broker had previously assumed, leading to a narrower projected second-quarter loss.
However, it has cut its second-half forecasts because fuel prices are higher than expected. The note added that March-quarter demand appeared solid despite disruptions in Puerto Vallarta and fuel shortages in Cuba, while Canadian airlines had pushed through two rounds of fare increases since the start of the US-Iran conflict.
TD Cowen said investors are likely to focus on peak-season yields and bookings, demand elasticity, competitive capacity, CASM ex-fuel trends and the planned CEO transition at the end of the third quarter of 2026. It also noted that some investors hope the leadership change could trigger a rethink of Air Canada’s capital allocation framework, particularly around long-term capital expenditure targets and free cash flow measures.