Air Canada has reported a profitable fourth quarter, despite a significant drop in demand for travel to the U.S. This downturn is attributed to ongoing trade tensions and tariff policies impacting Canadian travelers. The Montreal-based airline released its earnings results during a call with investors and analysts.
Strong Q4 Performance Amid U.S. Travel Decline
In the last quarter of 2025, Air Canada achieved a net income of $296 million, a stark contrast to a loss of $644 million the previous year. This turnaround showcases the airline’s ability to adapt to changing market conditions.
Shifts in Travel Preferences
Statistics Canada reports that return trips to the U.S. by Canadian residents fell by 23.6% in November 2025 compared to the same month in 2024. This decline marks nine consecutive months of reduced passenger numbers at Canadian airports traveling to U.S. destinations.
- November 2025: 23.6% drop in U.S. travel demand
- October 2025: Continued decline in U.S.-bound passengers
The decreased interest in U.S. travel aligns with a broader sentiment among Canadians, who are increasingly choosing domestic and international travel options instead.
Impact of Trade Tensions
Trade tensions resulting from U.S. President Donald Trump’s tariff policies have negatively influenced Canada’s economy. These policies have led many Canadians to reconsider their travel plans and support local businesses through the Buy Canadian movement.
Corporate Travel and Cargo Demand
Air Canada’s strong financial performance can be attributed to an increase in demand for corporate travel and cargo services. Mark Galardo, Air Canada’s Chief Commercial Officer, noted a nearly 30% rise in corporate travel to Europe and the Pacific regions.
Galardo emphasized the importance of diversifying trade partners to mitigate the challenges imposed by U.S. tariffs. As Air Canada expands its markets, it aims to enhance its cargo operations as well.
Conclusion
Despite the decline in U.S. travel, Air Canada’s strategic pivot towards international destinations has proven beneficial. The airline’s ability to adapt and leverage new opportunities demonstrates resilience in a challenging economic climate.
