Since beginning his second presidential term, Donald Trump has repeatedly prodded at and provoked conflict with the United States' northern neighbor.
Between repeated references about Canada becoming the United States' 51st state and the narrowly avoided threat to impose 25% tariffs on everything coming out of the country, many Canadians have been swearing off and canceling already-booked trips to the U.S. in protest.
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Air Canada's earnings beat two records, and analyst estimates
The United States Travel Association estimated that even a 10% reduction in Canadian visitors to popular holiday states like Florida and California would cost the U.S. travel industry over $2.1 billion.
On Feb. 13, Canada's flagship airline, Air Canada (ACDVF,) released a fourth-quarter earnings report showing operating revenue of C$5.40 billion ($3.81 billion USD). This is a 4% increase from the same quarter a year ago, and the airline's annual revenue of C$22.25 billion ($15.7 billion) is also a record.
"We are well positioned with a solid year behind us to leverage our competitive advantages, including our iconic brand, premium products, and global network, and to continue delivering on our plans," Air Canada CEO Michael Rousseau said in a statement.
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The carrier also said that it predicts earnings before interest, taxes, depreciation and amortization (EBITDA) for 2025 to fall within the C$3.4 billion ($2.39 billion) to C$3.8 billion range. The higher end is significantly higher than analyst estimates of C$3.5 billion ($2.47 billion USD).
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After the earnings were published, Air Canada stock soared by 1.5% to $12.85 and started Feb. 14 up 5% at $13.50. While the year has been tumultuous, shares rose by 15% in the last six months.
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Although the numbers are from before Trump came into power and started making jabs at Canada, several analysts have been saying that the rush of Canadians swearing off U.S. travel means only good things for the domestic airline.
"The demand environment remains favourable [Canadian spelling]," Rousseau said further. "We remain agile and responsive in our dynamic aviation industry and are prepared to adapt promptly to any changes or challenges that may arise."
An average from 13 investment firms giving public companies ratings keeps Air Canada at "Moderate Buy," which means the stock is expected to slightly outperform the market.
Prior to the start of the year and Trump's presidency, Air Canada announced a number of new flights between the two countries: a new route from Montreal to Cincinnati and flights between Vancouver and Nashville and Toronto and Jacksonville. All three flights will launch in May 2025 and were, at the time, predicted to increase weekly service between Canada and the U.S. by 160,000 additional seats.
In the earnings report, Air Canada said that heightened demand for travel to the Asia Pacific region and China has contributed to the strong numbers for 2024. The biggest drawback to more Canadians choosing the airline and domestic travel in particular, ultimately comes down to cost.
Skyscanner data shows that the average ticket price of C$262 ($185 USD) for a domestic flight within Canada gets close to what Canadians can pay to travel to nearby warm destinations.
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