Air Canada says fuel costs spiked 49% from last year, with travel demand up

Air Canada reported a 49% increase in fuel costs compared to the previous year while experiencing a surge in travel demand, resulting in record second-quarter operating revenues. The airline spent more than $1.7 billion on aircraft fuel during the three months ending June 30, 2026, up from nearly $1.15 billion a year prior. This rise in fuel expenses contributed to Air Canada's adjusted earnings before taxes and other costs expected to be between $2.9 and $3.2 billion for the full year, a decrease from the previously forecasted range of $3.35 billion to $3.75 billion.

The company's president and CEO, Michael Rousseau, confirmed that the weaker-than-expected outlook is primarily due to higher jet fuel prices, which are influenced by the ongoing Iran war and the subsequent restrictions on global oil supplies. In response to these challenges, Air Canada announced plans to sell a quarter of its Aeroplan loyalty program to Blackstone and La Caisse for $2.5 billion.

The company will retain 75% ownership and full control of the loyalty program, affirming that Aeroplan remains a core component of Air Canada's commercial strategy.