Air Canada’s Stock Falls 12% On Weak Earnings And Travel Decline

Air Canada’s (AC) stock fell 12% on July 29 after the Montreal-based carrier reported weak quarterly financial results that showed a continued decline in air travel.The airline continues to see lower demand for trips to the U.S. as Canadians shy away from America, with revenue dropping 11% on 8% less capacity in this year’s second quarter. Air Canada reported earnings per share (EPS) of $0.60 for Q2, down 39% from $0.98 a year earlier.The quarterly profit fell short of the consensus expectation of analysts who had EPS of $0.72 penciled in for the company. Revenue in the April through June quarter totaled $5.03 billion, up 1% from the same period of 2024 amid tepid capacity growth.The poor results and decline in air travel demand sent AC stock down sharply. At the same time, Air Canada faces a potential labour disruption. Air Canada’s flight attendants are voting on whether to give a strike mandate to the Canadian Union of Public Employees (CUPE), which represents them in collective bargaining. The flight attendant’s vote runs until Aug. 5 of this year.Analysts say the labour unrest adds to the uncertainty that is swirling around Air Canada and its performance for the remainder of this year. AC stock is down 13% on the year and trading at $19.34 per share.