Air Canada has lowered its full-year 2025 guidance after strike action from its flight attendants, represented by CUPE, took place in August.
Amid the labour dispute, the airline had suspended its guidance on August 18. The strike lasted three days, ending on August 19.
With the outlook reinstated, the airline now expects an adjusted EBITDA result of around C$2.9bn ($2.1bn) to C$3.1bn ($2.2bn) for the full year. Air Canada had previously anticipated an adjusted EBITDA of around C$3.2bn ($2.3bn) to C$3.6bn ($2.6bn) for the full year.
The financial impact of the labour disruption is estimated to be C$375 million ($269.4 million) in operating income and adjusted EBITDA.
This is comprised of around C$430 million ($308.9 million) in revenue impact — such as refunds, customer compensation, and lower travel bookings during the strike action — and an estimated C$90 million ($64.7 million) of incremental costs driven by customers' out-of-pocket expenses and labour-related operating costs.
The decline in flight activity for Air Canada had partially offset the impact by C$145 million ($104.2 million).
“Air Canada and CUPE are proceeding to arbitration to finalize the wage portion of the four-year tentative agreement," Air Canada said. "No labour disruption can be initiated by either party during the arbitration process or the term of the new agreement.”
For the full year, the airline's capacity is expected to be up 0.5% to 1.5%, compared to 2024. This was lowered from its previous outlook of an expected 1-3% increase.
Adjusted CASM increased from 14.25-14.50 Canadian cents to 14.60-14.70 Canadian cents in its updated guidance.
Free cash flow is anticipated to be between a negative C$50 million ($35.9 million) and a positive C$150 million ($107.7 million) for the year.
Previous guidance estimated a break-even result, in the range of positive or negative C$200 million ($143.7 million).