TORONTO — Air Canada’s executive team members on this morning’s earnings call say they’re satisfied with the airline’s Q2 2025 results – especially in light of persistently unpredictable market conditions.

“We are generally pleased with our results especially considering 2025 has not been business as usual to date,” said Air Canada’s President and CEO, Michael Rousseau, on today’s Q2 results call.

Air Canada’s operating revenues for the quarter exceeded $5.6 billion, up $113 million from the previous year. On an adjusted basis, Air Canada had a net income of $207 million in the quarter compared with $369 million in the same quarter last year. The airline carried 11.6 million passengers in Q2.

Transborder travel has been on the radar for the airline and the industry at large since early 2025, when numbers started to drop dramatically. In May 2025, reporting the year’s Q1 results, Rousseau noted booking declines on transborder routes in the low teens over the next six months.

For today’s Q2 results, the focus was the 11% decline in revenues on transborder routes.

Asked about cuts and reductions on U.S. routes and how quickly transborder capacity could be restored if demand ticks up, Mark Galardo, Air Canada’s VP Revenue and Network Planning and President, Cargo, said: “We have shifted capacity away from transborder. We made the right early calls to match our capacity to the rapidly changing landscape. The impact has been on traditional U.S. leisure markets like Florida, Arizona … We think we’re going to restore some of that capacity gradually. But for now, there’s no real improvement in the demand posture. We continue to think that the situation we’re in will continue all the way through the year.”

He added that Air Canada “can move capacity gradually or rapidly depending on how the market evolves.”

There was a shout-out for Air Canada Vacations, delivering a “solid performance” in Q2 based on strong consumer demand for sun destinations, said Galardo. “We have built a strong revenue base at ACV on which we will expand in the second half of the year,” he added.

Air Canada’s winter 2025-2026 schedule, released in May 2025, includes a 16% increase in flights to Latin America.

UPTICK IN SHOULDER SEASON BOOKINGS “BODES WELL”

The airline’s strength to other international destinations like Europe, Asia and more, with a network that has vastly expanded in recent years, has served it well. “Our network is well adapted to international demand,” said Galardo. “We continue to see very strong demand for our international network at large.”

Now that travellers are finally getting the message about overtourism and the benefits of shoulder season travel – or maybe they’re just looking to avoid sweating summer temperatures – Air Canada is seeing real change in its international booking patterns, with noticeable upticks for fall 2025 and even into winter and early 2026. “We’re seeing more strength in September, October and into early winter and that bodes well for us,” said Galardo. “Demand continues to grow off-peak, especially for southern Europe.”

Air Canada also “kept a strong and steady presence, increasing capacity on key destinations” within Canada.

Galardo added that Air Canada’s Q2 strengths included not just its strong performance on transatlantic routes, but also “continued and sustained demand for our premium products.”

While it’s not just business travellers booking those premium products, corporate travel has traditionally been a huge revenue-generator for airlines. The pandemic may have changed corporate travel forever, however Galardo reports that Air Canada’s Q2 was “pretty stable” for business travel. “Going into September and October, we have no reason to believe it will slow down,” he added.

NEW A321 XLRs, UNION NEGOTIATIONS & THE PORTER-AA CODESHARE FILING

Looking beyond 2025, Air Canada is looking forward to the delivery of its new Airbus A321 XLR aircraft, with 11 planes scheduled to join the fleet by the end of 2026. “We have exciting plans for this game-changing aircraft,” said Galardo. Air Canada plans to debut its new A321 XLR summer 2026 destinations in the coming weeks. “Stay tuned,” said Galardo.

And what about ongoing negotiations with the bargaining committee for the Air Canada Component of CUPE, representing more than 10,000 flight attendants at Air Canada and Air Canada Rouge?

The strike vote began yesterday, July 28, and continues through Aug. 5. “Such a vote is a normal step in the negotiation process and we remain committed to the bargaining process,” said Rousseau. “We remain focused on what we can control, and that includes running operations effectively … and delivering a positive travel experience to our customers.”

Asked if Air Canada is seeing any impact from travellers booking away from the airline out of concern there may be a strike by mid-August, Rousseau declined comment “given where we are in the negotiations and the confidentiality of those discussions.”

The team was also asked about Porter Airlines and American Airlines filing with the US DOT for a codeshare partnership, and how that could impact Air Canada.

“We’re seeing an evolving alliance landscape,” said Galardo, noting Air Canada’s own deep ties with Star Alliance member United Airlines, and WestJet’s joint venture agreement with Delta.

“We have a very strong relationship with United. I don’t see much of a change to the way we’re operating today,” said Galardo.

Rousseau added: “Star Alliance is the best alliance out there. We’re certainly going to raising our game from our perspective with Star Alliance.”