Air Canada says it may reduce flights to certain US destinations later this year if demand from travellers begins to lag, as the airline acknowledged it is coping with uncertainty from the current economic environment, including the threat of tariffs.

The Montreal-based carrier is preparing in case customers decide to fly south of the border less often in 2025, said executive VP of revenue and network planning Mark Galardo.

But he cautioned that hasn’t yet been the case, with January booking trends aligning with the company’s expectations.

“We are anticipating proactively that there could be a slowdown,” Galardo told analysts on a conference call, as the airline reported its fourth-quarter earnings.

“In the US, we don’t see any major slowdown or anything substantial that would change our view of the market. That being said, if we could de-risk this a little bit and be a bit proactive and move capacity into other sectors we see strength in, I think that’s the right move right now in this context.”

Galardo said leisure destinations such as Florida, Las Vegas and Arizona could be affected if Canadians pull back on travel plans to the US.

He added there could be an opportunity to redeploy airplanes to domestic Canadian leisure markets instead.

“It’s still premature to discuss the potential impact, if any, of actual or potential regulatory tariffs or possible retaliations,” Galardo said. “We’re diligently and continuously monitoring customer behaviour and market dynamics. If these shift in the future, we have ample flexibility to respond by moving capacity around as we’ve always done.”

Despite those preparations, Air Canada maintained its guidance for 2025. In its outlook, the airline said it expects its capacity measured by available seat miles to be up three to five per cent from 2024.

In its fourth quarter, Air Canada reported a loss of $644 million, compared with a profit of $184 million in the same quarter a year earlier, as its operating revenue increased.

Chief executive Michael Rousseau said the airline will “continue to navigate uncertainty and external pressures with prudence and decisiveness,” noting Air Canada is prepared to “adapt promptly to any changes or challenges that may arise.”

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