Air Canada (TSX:AC.B) shares tumbled more than 13% after the airline reported a significant drop in income for the second quarter as profitability was pressured by broader economic uncertainty and international conflicts.
The company reported net income of C$186 million, down from C$410 million for the same period in 2024.
Adjusted earnings per share were C$0.60, down from C$0.98 in the year-ago quarter and below estimates of C$0.72.
Operating revenues increased 2% year-over-year to $5.63 billion, surpassing estimates of $5.55 billion.
“Air Canada’s second quarter 2025 results showcase the airline's many strengths in the face of a challenging environment,” Air Canada CEO Michael Rousseau said in a statement.
“We remained disciplined and consistent in executing on a long-term plan that is rooted in Air Canada’s proven commercial strategy, while navigating macroeconomic uncertainty and geopolitical tensions.”
The company maintained its full-year guidance, continuing to expect adjusted EBITDA in the range of C$3.2 billion to C$3.6 billion and free cash flow to be breakeven, plus or minus C$200 million.
The airline expects to boost its Available Seat Miles (ASM) capacity by 1% to 3% over 2024.
Shares of Air Canada traded down 13.6% at C$19 late morning on Tuesday.