Air Canada cuts earnings forecast as fuel costs surge and profit falls 47 per cent Air Canada lowered its full-year earnings outlook to between 2.4 billion and 2.7 billion dollars after third-quarter net income fell 47 per cent to 139 million dollars, though operating revenues hit a record 6.98 billion dollars. Air Canada has cut its full-year earnings forecast as soaring fuel prices weigh on results, after a quarter in which its profit nearly halved. The Montreal-based airline now expects adjusted earnings of between 2.4 billion and 2.7 billion dollars for the year. That is down from the 2.9 billion to 3.2 billion dollars the company predicted less than three months earlier. The airline said the revision reflects its current expectation of higher fuel prices for the rest of the year. The darker outlook came as net income attributable to shareholders fell 47 per cent to 139 million dollars in the three months ended Sept. 30. That compares with the same period a year earlier.Operating Reaches Record HighOperating revenues, however, jumped 21 per cent to a third-quarter record of 6.98 billion dollars. The carrier leaned on fare increases to try to offset rising expenses, including a 906-million-dollar year-over-year increase in fuel costs. On an adjusted basis, earnings stayed flat at 75 cents per share. That was well above analysts' predictions of 50 cents per share, according to financial markets firm LSEG Data and Analytics.Chief financial officer John Di Bert said the company's surging revenues reflect strong demand and more cash intake per passenger. He said the challenging environment is expected to persist. Di Bert added that Air Canada's strong financial position gives it flexibility to respond to near-term developments. He said the company remains focused on executing on what it can control.Fuel Costs Press Airline ProfitsAirfares in Canada rose 19.4 per cent year-over-year in September, according to Statistics Canada. National Bank analyst Cameron Doerksen said overall demand remains positive. Doerksen noted that Air Canada had indicated it raised fares further in recent weeks. He said the airline had expected to offset 100 per cent of higher fuel costs in the fourth quarter.Given the higher fuel costs so far in the quarter, Doerksen said he believes that offset is unlikely. He made the comments in a note to investors last week. The earnings update was released Thursday. Air Canada is the country's largest airline and is based in Montreal.The report by The Canadian Press was first published Oct. 29, 2026. The airline's planes operate out of major hubs including Montreal-Trudeau International Airport. Rising fuel expenses have affected carriers across the industry, but Air Canada's revised guidance shows how quickly higher costs can erode profit even as revenues climb. The company is betting that strong travel demand and higher fares will help cushion the impact.Investors Watch Demand OutlookStill, the gap between its previous forecast and the new range is hundreds of millions of dollars. That shortfall underscores the pressure that fuel prices are placing on the airline's bottom line. Investors and analysts will be watching whether demand holds up through the rest of the year. They will also track whether further fare increases are possible without weakening bookings.Air Canada said it remains focused on what it can control. Its latest results show record revenue alongside a sharp drop in profit, a combination driven largely by fuel.