PIZZA PIZZA ROYALTY CORP. ANNOUNCES SECOND QUARTER 2025 RESULTS
Second Quarter highlights:
Same store sales (2) increased 2.1%
Royalty Pool sales increased 3.9%
Adjusted earnings per share (5) increased 1.3%
Year to Date highlights:
Same store sales (2) increased 1.6%
Royalty Pool sales increased 2.8%
Adjusted earnings per share (5) increased 0.2%
Restaurant network increased by 3 net locations
"Our strong second quarter performance highlights our ongoing commitment to growth, supported by menu innovation and strategic sports partnerships," said Paul Goddard, President and CEO of Pizza Pizza Limited. "Despite headwinds in the broader quick service landscape, our momentum continued this quarter and our marketing initiatives drove growth in both transactions and check."
SALES
Royalty Pool System Sales for the Quarter increased 3.9% to $161.4 million from $155.4 million in the same quarter last year. By brand, sales from the 694 Pizza Pizza restaurants in the Royalty Pool increased 4.1% to $139.3 million for the Quarter compared to $133.8 million in the same quarter last year. Sales from the 100 Pizza 73 restaurants increased 2.4% to $22.0 million for the Quarter compared to $21.5 million in the same quarter last year.
Royalty Pool System Sales for the Period increased 2.8% to $312.7 million from $304.3 million in the same period last year. By brand, sales from the 694 Pizza Pizza restaurants in the Royalty Pool increased 2.7% to $269.2 million for the Period compared to $262.1 million in the same period last year. Sales from the 100 Pizza 73 restaurants increased 3.3% to $43.5 million for the Period compared to $42.1 million in the same period last year.
For the Quarter and Period, the increase in Royalty Pool System Sales is driven by the same store sales and new restaurants added to the Royalty Pool on January 1, 2025. Additionally, while the number of restaurants in the Pizza 73 Royalty Pool remains less than 2019 when there were 104 restaurants, the negative impact on Royalty Pool System Sales due to prior year restaurant closures has been mitigated by the Make-Whole Carryover Amount. See "Same Store Sales Growth", and "Restaurants Added to the Royalty Pool".
The Pizza Pizza and Pizza 73 restaurants are subject to seasonal variations in their business. System Sales for the quarter ended March 31 have generally been the lowest. System Sales for the quarter ended December 31 have generally been the highest relative to other quarters.
SAME STORE SALES GROWTH ("SSSG")
SSSG, the key driver of yield growth for shareholders of the Company, increased 2.1% (2024 – decreased 3.9%) for the Quarter, and increased 1.6% for the Period (2024 – decreased 1.3%).
SSSG is driven by the change in the customer check and customer traffic, both of which are affected by changes in pricing and sales mix. During the Quarter and Period, at both brands, restaurant traffic and average customer check increased.
MONTHLY DIVIDENDS AND WORKING CAPITAL RESERVE
The Company's dividends remained unchanged in the Quarter and Period. The Company declared shareholder dividends of $5.7 million, or $0.2325 per share, for the Quarter and the prior year comparable quarter, and $11.4 million, or $0.4650 per share, for the Period and the prior year comparable period. The payout ratio is 108% for the Quarter and was 112% for the Period.
The Company's policy is to distribute all available cash in order to maximize returns to shareholders over time, after allowing for reasonable reserves. Despite seasonal variations inherent to the restaurant industry, the Company's policy is to make equal dividend payments to shareholders on a monthly basis in order to smooth out income to shareholders. After the reduction in the monthly dividend in April 2020, and the eight subsequent increases, including the most recent increase in November 2023, any further change will be implemented with a view to maintaining the continuity of consistent monthly distributions. It is expected that future dividends will continue to be funded entirely by cash flow from operations and the cash reserve.
The Company's working capital reserve is $4.8 million at June 30, 2025, which is a decrease of $1.3 million in the Period due to the 112% payout ratio. System sales for the quarter ended March 31 have generally been the softest and historically results in a payout ratio over 100%. The reserve is available to stabilize dividends and fund other expenditures in the event of short-to-medium-term variability in System Sales and, thus, the Company's royalty income. The Company has historically targeted a payout ratio at or near 100% on an annualized basis.
EARNINGS PER SHARE ("EPS")
Fully-diluted basic EPS increased 1.3% to $0.236 for the Quarter compared to the prior year comparable quarter.
As compared to basic EPS, the Company considers adjusted EPS (5) to be a more meaningful indicator of the Company's operating performance and, therefore, presents fully diluted, adjusted EPS. The adjusted EPS for the Quarter increased 1.3% to $0.241 when compared to the same period of 2024, and was comparable at $0.47 for the Period
RESTAURANT DEVELOPMENT
As previously announced, the number of restaurants in the Company's Royalty Pool increased by 20 net locations to 794 on the January 1, 2025 Adjustment Date, and consists of 694 Pizza Pizza restaurants and 100 Pizza 73 restaurants. The number of restaurants in the Royalty Pool will remain unchanged through 2025.
During the Quarter, Pizza Pizza Limited ("PPL") opened three traditional and five non-traditional Pizza Pizza restaurants, and closed one traditional and four non-traditional Pizza Pizza restaurants. Additionally, at the Pizza 73 brand, PPL opened one traditional restaurant and closed one traditional restaurant.
During the Period, PPL opened five traditional and seven non-traditional Pizza Pizza restaurants, and closed two traditional and eight non-traditional Pizza Pizza restaurants. PPL also opened two traditional Pizza 73 restaurants, and closed one Pizza 73 traditional restaurant.
PPL management expects to grow its traditional restaurant network by 2% to 3% and continue its renovation program through 2025.
Readers should note that the number of restaurants added to the Royalty Pool each year may differ from the number of restaurant openings and closings reported by PPL on an annual basis as the years for which they are reported differ slightly.
CREDIT FACILITY
On March 20, 2025, the Company's existing credit facility was extended for three years with a new maturity date of April 24, 2028. Mandatory repayment remains interest-only until the loan matures. The new facility bears interest at Canadian Overnight Repo Rate Average ("CORRA") rate plus a credit spread of 1.00% to 1.50%, depending on the level of certain financial ratios. Additionally, on April 3, 2025, the Partnership entered into a three-year forward swap arrangement commencing April 24, 2025. With the new swap and credit spread, the interest rate increased to 3.51%, comprised of a fixed rate of 2.51% plus a credit spread currently set at 1.0%.
The credit facility includes affirmative and negative covenants customary for agreements of this nature, and as at June 30, 2025 all covenants have been met. The Partnership is required to maintain a funded debt-to-EBITDA ratio not to exceed 2.5:1.0 on a four quarter rolling average and an interest coverage ratio of minimum 3:1. The debt-to-EBITDA ratio for the last four-quarter rolling average is 1.19:1 and the interest coverage ratio is 29.47:1 (December 31, 2024 – 1.20:1). The Partnership is presently making interest-only payments on the non-revolving credit facility. As the debt-to-EBITDA level changes, the credit spread will change as follows.
SELECTED FINANCIAL HIGHLIGHTS
The following tables set out selected financial information and other data of the Company and should be read in conjunction with the June 30, 2025 unaudited interim condensed consolidated financial statements of the Company ("Financial Statements"). Readers should note that the 2025 results are not directly comparable to the 2024 results due to there being 794 restaurants in the 2025 Royalty Pool compared to 774 restaurants in the 2024 Royalty Pool.
(in thousands of dollars, except number of restaurants, days in the year, per share amounts, and noted otherwise)
Three months
ended
June 30, 2025
Three months
ended
June 30, 2024
Six months
ended
June 30, 2025
Six months
ended
June 30, 2024
Restaurants in Royalty Pool (1)
794
774
794
774
Same store sales growth (2)
2.1 %
-3.9 %
1.6 %
-1.3 %
Days in the Period
91
91
181
182
System Sales reported by Pizza Pizza restaurants in the Royalty Pool (6)
$ 139,347
$ 133,839
$ 269,167
$ 262,123
System Sales reported by Pizza 73 restaurants in the Royalty Pool (6)
22,035
21,517
43,538
42,129
Total System Sales
$ 161,382
$ 155,356
$ 312,705
$ 304,252
Royalty – 6% on Pizza Pizza System Sales
$ 8,361
$ 8,030
$ 16,150
$ 15,727
Royalty – 9% on Pizza 73 System Sales
1,983
1,937
3,919
3,792
Royalty – International operations
4
-
8
Royalty income
$ 10,348
$ 9,967
$ 20,077
$ 19,519
Interest paid on borrowings (3) (5)
(392)
(319)
(709)
(638)
Administrative expenses
(283)
(194)
(435)
(321)
Interest income
61
103
129
224
Adjusted earnings available for distribution to the Company and Pizza Pizza Limited (5)
$ 9,734
$ 9,557
$ 19,062
$ 18,784
Distribution on Class B and Class D Exchangeable Shares (4)
(2,726)
(2,584)
(5,486)
(5,456)
Current income tax expense
(1,707)
(1,712)
(3,363)
(3,358)
Adjusted earnings available for shareholder dividends (5)
$ 5,301
$ 5,261
$ 10,213
$ 9,970
Add back:
Distribution on Class B and Class D Exchangeable Shares (4)
2,726
2,584
5,486
5,456
Adjusted earnings from operations (5)
$ 8,027
$ 7,845
$ 15,699
$ 15,426
Adjusted earnings per share (5)
$ 0.241
$ 0.238
$ 0.470
$ 0.469
Basic earnings per share
$ 0.236
$ 0.233
$ 0.469
$ 0.468
Dividends declared by the Company
$ 5,724
$ 5,724
$ 11,448
$ 11,448
Dividend per share
$ 0.2325
$ 0.2325
$ 0.465
$ 0.465
Payout ratio (5)
108 %
109 %
112 %
115 %
June 30,
2025
December 31,
2024
Working capital (5) (7)
$ 4,786
$ (40,908)
Total assets
$ 379,115
$ 373,745
Total liabilities
$ 76,086
$ 75,527
(1)
The number of restaurants for which the Pizza Pizza Royalty Limited Partnership (the "Partnership") earns a royalty ("Royalty Pool"), as defined in the amended and restated Pizza Pizza license and royalty agreement (the "Pizza Pizza License and Royalty Agreement") and the amended and restated Pizza 73 license and royalty agreement (the "Pizza 73 License and Royalty Agreement") (together, the "License and Royalty Agreements"). For the 2025 fiscal year, the Royalty Pool includes 694 Pizza Pizza restaurants and 100 Pizza 73 restaurants. The number of restaurants added to the Royalty Pool each year may differ from the number of restaurant openings and closings reported by Pizza Pizza Limited ("PPL") on an annual basis as the periods for which they are reported differ slightly (see "Royalty Pool Adjustments").
(2)
Same store sales growth ("SSSG") is a supplementary financial measure under NI 52-112 and therefore may not be comparable to similar measures presented by other issuers. SSSG means the change in Period's gross sales of a particular Pizza Pizza or Pizza 73 restaurant as compared to sales in the previous comparative Period, where the restaurant has been open at least 13 months. Additionally, for a Pizza 73 restaurant whose restaurant territory was adjusted due to an additional restaurant, the sales used to derive the Step-Out Payment (calculated as the difference between the average monthly Pizza 73 Royalty payment attributable to that Adjusted Restaurant in the 12 months immediately preceding the month in which the territory reduction occurs, less the Pizza 73 Royalty payment attributable to the restaurant in the current month) may be added to sales to arrive at SSSG. SSSG does not have any standardized meaning under IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). See "Reconciliation of Non-IFRS Measures".
(3)
The Company, indirectly through the Partnership, incurs interest expense on the $47 million outstanding bank loan. Interest expense also includes amortization of loan fees. See "Interest Expense".
(4)
Represents the distribution to PPL from the Partnership on Class B and Class D Units of the Partnership held by PPL directly and indirectly through a wholly-owned subsidiary. The Class B and D Units are exchangeable into common shares of the Company ("Shares") based on the value of the Class B Exchange Multiplier and the Class D Exchange Multiplier at the time of exchange as defined in the License and Royalty Agreements, respectively, and represent 26.2% of the fully diluted Shares at June 30, 2025 (December 31, 2024 – 25.2%). During the quarter ended March 31, 2025, as a result of the final calculation of the Exchangeable Class B and Class D Share entitlements related to the January 1, 2024 Adjustment to the Royalty Pool, PPL was paid a distribution on additional Exchangeable Shares as if such Shares were outstanding as of January 1, 2024. Included in the three months ended March 31, 2025, is the payment of $34 in distributions to PPL pursuant to the true-up calculation (March 31, 2024 - PPL received $288).
(5)
"Adjusted earnings available for distribution to the Company and Pizza Pizza Limited", "Adjusted earnings from operations", "Adjusted earnings available for shareholder dividends", "Adjusted earnings per Share", "Interest paid on borrowings", "Payout Ratio", and "Working Capital" are non-GAAP financial measures under NI 52-112. They do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. See "Reconciliation of Non-IFRS Measures" and "Interest Expense".
(6)
System Sales (as defined in the License and Royalty Agreements) reported by Pizza Pizza and Pizza 73 restaurants include the gross sales of Pizza Pizza company-owned, jointly-controlled and franchised restaurants, and the monthly Make-Whole Payment, excluding sales and goods and service tax or similar amounts levied by any governmental or administrative authority. System Sales do not represent the consolidated operating results of the Company but are used to calculate the royalties payable to the Partnership as presented above.
(7)
Working capital for 2024 includes the reclassification of the $47 million credit facility to current liabilities, see "Working Capital". Excluding the reclassification, working capital would be $6.1 million.
A copy of the Company's interim consolidated financial statements and related Management's Discussion and Analysis ("MD&A") will be available at www.sedarplus.ca and www.pizzapizza.ca after the market closes on August 7, 2025.
As previously announced, the Company will host a conference call to discuss the results. The details of the conference call are as follows:
Date: August 7, 2025
Time: 5:30 p.m. ET
Call-in number: 416-945-7677 / 888-699-1199
Recording call in number: 289-819-1450 / 888-660-6345
Available until midnight, August 21, 2025
Conference ID: 57961#
A recording of the call will also be available on the Company's website at www.pizzapizza.ca.
FORWARD-LOOKING STATEMENTS
Certain statements in this report, including information regarding the Company's dividend policy, its ability to meet covenants and other financial obligations, and their ability to achieve their business objectives, constitute "forward-looking" statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, such statements include such words as "may", "will", "expect", "believe", "plan", and other similar terminology in conjunction with a discussion of future events or operating or financial performance. These statements reflect management's current expectations regarding future events and operating and financial performance and speak only as of the date of this MD&A. The Company does not assume any obligation to update any such forward looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. These forward-looking statements involve a number of risks and uncertainties. The following are some factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking statements: changes in national and local business and economic conditions including those resulting from the COVID-19 pandemic (such as customers' ability and willingness to visit restaurants and their perception of health and food safety issues, discretionary spending patterns and supply chain limitations, and the related financial impact on PPL and its franchisees and restaurant operators), impacts of legislation and governmental regulation, accounting policies and practices, competition, changes in demographic trends and changing consumer preferences, and the results of operations and financial condition of PPL. The foregoing list of factors is not exhaustive and should be read in conjunction with the other information included in the foregoing MD&A, the PPL financial statements for the period ended June 29, 2025 and the related MD&A and the Company's Annual Information Form.
Exhibit One: Reconciliation of Non-IFRS Measures
The Company's earnings, as presented under IFRS includes non-cash items, such as deferred tax, that do not affect the Company's business operations or its ability to pay dividends to shareholders. The Company believes its earnings are not the only, or most meaningful, measurement of the Company's ability to pay dividends or measure the rate at which the Company is paying out its earnings. Therefore, the Company reports the following non-IFRS measures:
Adjusted earnings available for distribution to the Company and PPL;
Adjusted earnings from operations;
Adjusted earnings available for shareholder dividends;
Adjusted earnings per share ("EPS");
Payout Ratio; and
Working Capital.
The Company believes that the above noted measures provide investors with more meaningful information regarding the amount of cash that the Company has generated to pay dividends, and, together with Interest Paid on Borrowings and SSSG, help illustrate the Company's operating performance and highlight trends in the Company's business. These measures are also frequently used by analysts, investors, and other interested parties in the evaluation of issuers in the Company's sector, particularly those with a royalty-based model. The adjustments to net earnings as recorded under IFRS relate to non-cash items included in earnings and cash payments accounted for on the statement of financial position. Investors are cautioned, however, that this should not be construed as an alternative to net earnings as a measure of profitability. The method of calculating the Company's NI 52-112 non-IFRS financial measures: Adjusted earnings available for distribution to the Company and Pizza Pizza Limited, Adjusted earnings from operations, Adjusted earnings available for shareholder dividends, Adjusted EPS, Payout Ratio, Working Capital and SSSG for the purposes of this MD&A may differ from that used by other issuers and, accordingly, these measures may not be comparable to similar measures used by other issuers.
The table below reconciles the following to "Earnings for the period before income taxes" which is the most directly comparable measure calculated in accordance with IFRS:
Adjusted earnings available for distribution to the Company and Pizza Pizza Limited;
Adjusted earnings from operations; and
Adjusted earnings available for shareholder dividends.
(in thousands of dollars, except number of shares)
Q2 2025
Q1 2025
Q4 2024
Q3 2024
Earnings for the period before income taxes
9,734
9,328
9,840
9,566
Adjusted earnings available for distribution to the Company and Pizza Pizza Limited
9,734
9,328
9,840
9,566
Current income tax expense
(1,707)
(1,656)
(1,767)
(1,714)
Adjusted earnings from operations
8,027
7,672
8,073
7,852
Less: Distribution on Class B and Class D Exchangeable Shares
(2,726)
(2,760)
(2,584)
(2,584)
Adjusted earnings available for shareholder dividends
5,301
4,912
5,489
5,268
Weighted average Shares – diluted
33,353,588
33,353,588
32,908,631
32,908,631
(in thousands of dollars, except number of shares)
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Earnings for the period before income taxes
9,557
9,227
10,084
10,080
Adjusted earnings available for distribution to the Company and Pizza Pizza Limited
9,557
9,227
10,084
10,080
Current income tax expense
(1,712)
(1,646)
(1,834)
(1,833)
Adjusted earnings from operations
7,845
7,581
8,250
8,247
Less: Distribution on Class B and Class D Exchangeable Shares
(2,584)
(2,872)
(2,370)
(2,316)
Adjusted earnings available for shareholder dividends
5,261
4,709
5,880
5,931
Weighted average Shares – diluted
32,908,631
32,908,631
32,337,580
32,337,580
The Basic EPS and the Adjusted EPS calculations are based on fully diluted weighted average shares, and both include PPL's Class B and Class D Exchangeable Shares since they are exchangeable into and economically equivalent to the Shares. See "Adjusted EPS".
Adjusted EPS is calculated by dividing Adjusted earnings from operations, as explained above, by the fully diluted weighted average shares. Adjusted EPS for the Quarter increased 1.3% to $0.241 when compared to the same period of 2024, and was comparable at $0.470 for the Period.
Payout Ratio is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company presents the Payout Ratio to illustrate the earnings being returned to shareholders. The Company's Payout Ratio is calculated by dividing the dividends declared to shareholders by the adjusted earnings from operations, after paying the distribution on Class B and Class D Exchangeable Shares, in that same period.
Working Capital is defined as total current assets less total current liabilities. The Company views working capital as a measure for assessing overall liquidity and its ability to stabilize dividends and fund unusual expenditures in the event of short- to medium-term variability in Royalty Pool System Sales. In 2024, the borrowings of $47.0 million were reclassified to current liabilities as the facility was scheduled to come due in April 2025. On March 20, 2025, the Company renewed its facility for a three-year term and maturity is now April 2028. Excluding the impact of the borrowings in 2024, the working capital reserve would have been $6.1 million as at December 31, 2024. The use of the working capital during the Period relates to the payout ratio of 112%.
SSSG is a key indicator used by the Company to measure performance against internal targets and prior period results. SSSG is commonly used by financial analysts and investors to compare PPL to other QSR brands. SSSG is defined as the change in period gross sales of Pizza Pizza and Pizza 73 restaurants as compared to sales in the previous comparative period, where the restaurant has been open at least 13 months. Additionally, for a Pizza 73 restaurant whose restaurant territory was adjusted due to an additional restaurant, the sales used to derive the Step-Out Payment may be added to sales to arrive at SSSG (as defined in footnote 2 on page 3). It is a key performance indicator for the Company as this measure excludes sales fluctuations due to store closings, permanent relocations and chain expansion.
The following table calculates SSSG by reconciling Royalty Pool System Sales, based on calendar periods, to PPL's 13-week sales reporting period used in calculating same store sales.
SOURCE Pizza Pizza Royalty Corp.
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We deploy global capabilities locally to our clients and deliver unique end-to-end services across the whole life cycle of an asset including consulting, advisory & environmental services, intelligent networks & cybersecurity, design & engineering, procurement, project & construction management, operations & maintenance, decommissioning and capital. The breadth and depth of our capabilities are delivered to clients in strategic sectors such as Engineering Services, Nuclear and Capital. News and information are available at or follow us LinkedIn. About AtkinsRéalis' Nuclear Sector AtkinsRéalis has over 70 years of global nuclear expertise, delivering nuclear technology products and full-service solutions to nuclear utilities around the world. AtkinsRéalis is the steward of CANDU® nuclear technology, operating on four continents, and provides advisory and engineering services to other nuclear developers. With an innovative technology portfolio, including access to over 500 patented solutions, AtkinsRéalis solves technically complex challenges across the whole nuclear lifecycle from design and new build through asset management and from life extension and late life management through decommissioning and waste management. AtkinsRéalis operates and manages government nuclear research sites, transforming ageing infrastructure and safely managing legacy nuclear waste. AtkinsRéalis' CANDU technology also allows for the co-production of medical radioisotopes for cancer detection and treatment. The company also supports cancer treatment through its partnership with TerraPower to extract isotopes from legacy nuclear material. Learn more on our Nuclear market page. Forward-Looking Statements References in this press release to the "Company", "AtkinsRéalis", "we", us" and "our" mean, as the context may require, AtkinsRéalis Group Inc. or all or some of its subsidiaries or joint arrangements or associates. Statements made in this press release that describe the Company's expectations or strategies constitute "forward-looking statements", which can be identified by the use of the conditional or forward-looking terminology such as "estimates", "expects", "forecasts", "intends", "may", "objective", "plans", "projects", "should", "will", "likely", or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. The Company cautions that, by their nature, forward-looking statements involve risks and uncertainties, and that its actual actions or results could differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Company's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements made in this press release are based on a number of assumptions believed by the Company to be reasonable as at the date hereof. The assumptions are set out throughout the Company's 2024 annual management disclosure & analysis ("2024 MD&A") (particularly in the sections entitled "Critical Accounting Judgments and Key Sources of Estimation Uncertainty" and "How We Analyze and Report our Results") filed with the securities regulatory authorities in Canada, available on SEDAR+ at and on the Company's website at under the "Investors" section. If these assumptions are inaccurate, the Company's actual results could differ materially from those expressed or implied in such forward-looking statements. In addition, important risk factors could cause the Company's assumptions and estimates to be inaccurate and actual results or events to differ materially from those expressed in or implied by these forward-looking statements. Those risks are identified in the 2024 MD&A (particularly in the section entitled "Risk and Uncertainties"), as may be updated from time to time in the Company's interim quarterly MD&A, are not exhaustive. The forward-looking statements herein reflect the Company's expectations as at the date of this press release and are subject to change after this date. The Company does not undertake to update publicly or to revise any such forward-looking statements whether as a result of new information, future events or otherwise, unless required by applicable legislation or regulation. The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement.
The Market Online
3 hours ago
- The Market Online
Air Canada suspends plans to restart operations, claims CUPE defied 'return to work' directive
Air Canada delays flight resumption after CUPE flight attendants defied a Canada Industrial Relations Board (CIRB) order to return to work, continuing an illegal strike Approximately 240 flights cancelled on Sunday, adding to the 500,000 customers already affected since operations were suspended on August 16 Air Canada suspends financial guidance for Q3 and full-year 2025 due to the ongoing disruption, while offering refunds, credits, and limited rebooking options to affected passengers Air Canada stock (TSX:AC) opened trading at C$19.03 Air Canada (TSX:AC) has suspended its plan to resume limited operations by Air Canada and Air Canada Rouge, following what it described as an illegal directive by the Canadian Union of Public Employees (CUPE) instructing flight attendants to defy a return-to-work order issued by the Canada Industrial Relations Board (CIRB). This content has been prepared as part of a partnership with Air Canada and is intended for informational purposes only. The airline had intended to restart flights on Monday after all operations were grounded on August 16 due to a strike by CUPE, which represents approximately 10,000 flight attendants. However, the CIRB ruled on August 17 that the strike was unlawful and ordered CUPE leadership to instruct its members to immediately resume duties. Despite this directive, CUPE allegedly continued to encourage defiance, prompting Air Canada to delay its restart until tomorrow evening. As a result, approximately 240 flights scheduled for Sunday afternoon have been cancelled. Air Canada and Air Canada Rouge typically operate around 700 flights daily. The airline estimates that nearly 500,000 customers have been affected by cancellations since the strike began. Air Canada Express flights operated by Jazz and PAL continue to operate normally. In a statement, Air Canada expressed regret over the disruption and is offering affected customers full refunds, travel credits, or rebooking options on other carriers, though availability is limited due to the peak summer travel season. Customers are advised not to go to the airport unless they have confirmed bookings with other airlines. The CIRB's ruling included a clear mandate for CUPE and its members: CUPE and its officers must immediately cease all activities related to the unlawful strike and direct members to return to work. Individual union members are ordered to resume duties and refrain from further strike actions. CUPE must publicly revoke its strike authorization and notify members by 12:00 p.m. EDT today. Air Canada has also suspended its financial guidance for Q3 and full-year 2025, citing the significant operational and economic impact of the labour disruption. Air Canada is Canada's largest airline with a presence in more than 180 airports in Canada, the United States and internationally across six continents. Air Canada stock (TSX:AC) opened trading 3.74 per cent lower at C$19.03. Last week, its stock rose more than 3 per cent and it has flown 21.90 per cent higher since this time last year. Join the discussion: Find out what the Bullboards are saying about Air Canada and check out Stockhouse's stock forums and message boards. Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.
