Air Canada Projects CA$375M Q3 Loss Due to CUPE Strike, Warns of Yearly Impact

Air Canada has projected that a three-day strike by flight attendants in August 2025 could lead to a staggering loss of approximately CA$375 million in operating income for the airline.

In their initial results for the third quarter of 2025, released on September 24, 2025, Air Canada outlined that this financial hit consists of several factors: an estimated CA$430 million in lost revenue, CA$145 million in avoided costs, and CA$90 million in added expenses related to customer service and labor.

During negotiations with the Canadian Union of Public Employees (CUPE), which represents the flight attendants, Air Canada revealed that it prepared “comprehensive plans” to manage the safe and efficient winding down and subsequent restart of its operations.

As CUPE signaled its intention to strike, Air Canada activated these emergency plans, resulting in the cancellation of over 3,200 flights throughout August 2025.

“Air Canada sincerely regrets the impact of these disruptions on our customers and is committed to addressing all claims promptly and accurately, having already processed over 60,000 claims to date,” the airline stated.

The Airline Projects Lower Q3 Earnings

In its preliminary results for Q3 2025, Air Canada announced an expected 2% drop in operating capacity compared to the same period in 2024, largely attributable to the flight cancellations caused by the strike.

The carrier anticipates its operating income for Q3 2025 to fall between CA$250 and $300 million, which incorporates around CA$175 million resulting from one-time, non-cash pension plan adjustments and other labor-related costs.

Adjusted EBITDA is predicted to be in the range of CA$950 million to CA$1 billion, marking a decrease from the operating income of CA$1.040 billion and adjusted EBITDA of CA$1.523 billion recorded in Q3 2024.

Air Canada Revises Full-Year Forecast Following Strike

Due to the disruption caused by CUPE, Air Canada has revised its full-year forecast for 2025. While specific figures for total revenue or losses were not disclosed, the airline did share some key financial metrics.

Air Canada expects adjusted EBITDA to reach between CA$2.9 and $3.1 billion for the year, a slight downturn from prior estimates, alongside a planned minimal capacity increase of 0.5% to 1.5% compared to 2024.

Furthermore, the airline anticipates elevated unit costs and a free cash flow forecast ranging from -$50 million to CA$150 million throughout the year.