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Air Canada narrows 2025 core profit forecast amid US travel decline

Air Canada has lowered its core profit forecast for 2025 after reporting lower third quarter profit on Tuesday. The airline is grappling with the waning travel demand to the U.S. due to trade tensions.

The largest Canadian airline expects adjusted full-year earnings before interest taxes, depreciation, and amortization will be between C$2,95 billion ($2,10 billion) to C$3,05 billion. This is compared to its previous forecast of C$2.9 to C$3.1.

Travel between Canada and the U.S., which is a cross-border activity, has been significantly reduced this year. This was due to President Donald Trump's tariffs that were imposed on Canadian imports. These steep tariffs caused a backlash across the country.

The Canadian carrier was also hit by a major shut down in the third quarter after almost 10,000 flight attendants went on strike for better pay and compensation for "groundwork" that wasn't paid.

Air Canada's entire fleet was grounded after the four-day strike, which violated an order from the government to return to work. This resulted in thousands of cancelled flights, a severe disruption of operations, and a significant loss of revenue.

Last month, the airline cut its financial projections for the year and quarter to reflect the impact of the strike.

Air Canada reported that it incurred labor charges and a pension cost of C$173,000,000 in the third quarter. These included costs related to a tentative agreement with the Canadian Union of Public Employees.

The company's adjusted profit for the third quarter was C$223,000,000, or 75 Canadian Cents per share. This compares to C$969,000,000, or C$2.57 each share, one year ago.

The total operating revenue for the period was C$5.77billion, down from C$6.11billion in the previous year. (1 Canadian dollar = 1.4024 dollars) (Reporting and editing by Sriraj Kalluvila in Bengaluru, Shivansh Tiwary in Bengaluru)

(source: Reuters)