Originally Posted by
Adam Smith
The market is incredibly volatile at the moment, and you can expect AC's beta (volatility relative to the overall market) to remain high for quite some time. RBC and Loblaw's are down 3% today, for example, while AC is down 8%. On the other hand, when the market is going up, there's a good chance AC will be on the other side of that, outperforming the market by a good margin.
Very much agree with this. The fundamentals of the company are strong with labour peace for many years. The next 12-18 months are going to be very challenging but AC has navigated these waters before (although with a bit of help that they will likely receive again). One could certainly argue that with the leaner fleet, labour contracts, well funded pension, and captive Canadian market, combined with the likely return of the high performing routes for which they have ample slots, that AC will return to outperforming the market (and likely many of its competitors). Not sure I would necessarily add to my position, but if I didn't have one, I would certainly consider a small one (despite Warren Buffet's dramatic exit from aviation).