Air Canada says it saw a profitable quarter at the end of last year, even with a notable drop in demand for travel to the U.S. amid the ongoing trade war and tariff policies.
This comes after several straight months during which travellers surveyed said they were avoiding travel to the U.S., and considering alternative plans to travel within Canada and overseas.
The Montreal-based air carrier expanded on the latest earnings report in a conference call with investors and analysts on Friday. Publicly-traded companies are required by law to share earnings results to maintain transparency and accountability to shareholders.
“We leveraged our diversified geographic exposure to pivot capacity to areas of strength, such as to Canada and the Atlantic in the summer months, fully mitigating the impact of reduced Canada-U.S. demand,” said Mark Galardo, chief commercial officer and president of cargo at Air Canada in the call.
Return trips to the U.S. for Canadian residents fell 23.6 per cent on average in November compared with the same month in 2024, according to Statistics Canada.
Similarly, October saw the nine consecutive months where there were fewer passengers at Canadian airports bound for U.S. destinations, according to Statistics Canada, and that’s regardless of their place of origin or citizenship.
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The drop in demand from Canadians looking to travel to the U.S. comes after nearly of year trade tensions fueled by U.S. President Donald Trump’s tariff policies that have hurt Canada’s economy and job market. Trump has also repeated comments that Canada could avoid tariffs on sectors like steel and aluminum, autos and auto parts and lumber if it joins the U.S. as the “51st state.”
The soured sentiment towards the U.S. has also fueled the Buy Canadian movement, which sees Canadians looking to support local businesses and make purchases seen as favouring the Canadian economy as opposed to the U.S. — including through travel.
In the final three months of 2025, or the fourth quarter, Air Canada said it posted a net income of $296 million compared to a loss of $644 million a year earlier.
Air Canada’s reported profit was largely the result of strong demand for travel to overseas destinations, which may come at a higher price point versus travel to the U.S.
A lot of that demand was also coming from corporate travel and cargo deliveries, according to Galardo, who explains how Canada’s strategy to diversify trading partners to reduce the impacts of U.S. tariffs have benefitted Air Canada.
“We’re seeing a lot of corporate demand growth on the North Atlantic. We’ve seen almost a 30 per cent increase in the amount of corporate traffic going to Europe and the Pacific, and we attribute part of that to the fact that Canada is looking to diversify trade corridors,” said Galardo.
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