MONTREAL (Reuters) -Air Canada on Thursday lowered its annual adjusted core profit forecast and posted first-quarter revenue below analysts’ estimates, as trans-border traffic declined due to a weaker Canadian dollar and trade tensions with the United States.
The airline lowered its adjusted EBITDA forecast for the current year to a range of C$3.2 billion ($2.30 billion) to C$3.6 billion, from C$3.4 billion to C$3.8 billion earlier.
Canadians are boycotting U.S.-made goods and cancelling trips south of the border after President Donald Trump’s tariffs on Canada and his suggestions that the country should be annexed by the U.S.
Air Canada has previously said its decline in U.S.-bound bookings over the next six months mirrors an industry-wide drop of roughly 10%.
It reported a revenue of C$5.19 billion, down 1% from last year and below analysts’ average estimates of C$5.29 billion, according to data compiled by LSEG.
Its revenue was also weighed by winter storms that hit the carrier’s operations in Eastern Canada and an accident of a Delta Air Lines jet in Toronto in February.
The accident caused the closure of two runways for several days at Toronto Pearson International Airport, a key Air Canada hub, the company said in a filing.
Air Canada is targeting operating revenues of approximately C$30 billion by 2028, it said.
Trump’s tariffs have also raised prices on aircraft parts and planes that jet makers are trying to pass on to airlines.
North American carriers have been trimming flight schedules amid weakening U.S. domestic bookings, scrapping financial forecasts and tightening cost controls — including on rising labor expenses — to safeguard margins.
Air Canada, the country’s largest airline, reported a first-quarter adjusted loss of C$0.45 per share, which was wider than C$0.27 but smaller than analysts’ estimates of a C$0.54 per share loss.
($1 = 1.3923 Canadian dollars)
(Reporting By Allison Lampert in Montreal and Shivansh Tiwary in Bangalore, Additional reporting by Abhinav Parmar; Editing by Leroy Leo)
