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What drives Air Canada's stock price?

What drives Air Canada's stock price?

Old May 13, 2020, 2:44 pm
  #466  
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Originally Posted by YVRYEGYVR
This stock is getting hit hard again.

i am now regretting not selling this when it rallied like everything else in April.
I've lost all short term earnings, and I was playing this for some short term rally exploitation, oh well.

I'm convinced AC will be hit hard and long this time unfortunately. No matter how strong their balance sheet is, international paid J airline travel for business and leisure is going to be the last to recover. I think there will be a few more fake rallys not based on real fundamentals.

This is despite positive news from my province, BC, where numbers are dropping rapidly. Hospital admit numbers are essentially in single digits! If this trend continues positively, I still don't see myself taking leisure J trips for a while...
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.
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Old May 15, 2020, 7:08 pm
  #467  
 
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After yesterday's good recovery
CHR (okay ER IMO) $2.3's and AC $14.x , both dropped today

more layoffs at AC

"At a minimum, layoffs will reach 19,000 half of the current payroll and could go as high as 22,800."

"To minimize the number of layoffs, Air Canada will ask flight attendants to slash their schedules, go on leave for up to two years or resign with travel privileges, according to an internal bulletin to members from the Canadian Union of Public Employees sent out Thursday night and obtained by The Canadian Press."

https://www.cbc.ca/news/business/air-canada-layoffs-1.5572596

Last edited by jerryhung; May 15, 2020 at 7:19 pm
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Old May 15, 2020, 7:37 pm
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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).
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Old May 21, 2020, 6:02 am
  #469  
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Canadas largest airlines will burn through cash as they endure a long recovery for the industry, S&P Global Ratings said as it downgraded Air Canada and WestJet Airlines Ltd.

Air Canada wont see revenue and capacity return to last years levels until 2023, S&P said in an analysis that led to a one-notch downgrade to BB-. It kept its outlook negative.
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Old Jun 9, 2020, 3:52 pm
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Brian Madden discusses Air Canada share outlook

Brian Madden of Goodreid gives his outlook for shares of Air Canada.
https://www.bnnbloomberg.ca/video/br...canada~1937068
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Old Jul 18, 2020, 11:53 am
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AC makes the majority of it's money on Trans-pacific and Atlantic flights. Until borders open up AND people do not fear flying on long flights, the stock price for AC will be grim....

Last edited by tcook052; Jul 23, 2020 at 8:46 pm Reason: remove deleted quote
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Old Jul 22, 2020, 9:18 am
  #472  
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Originally Posted by eagle215
AC makes the majority of it's money on Trans-pacific and Atlantic flights.
What's your basis for that? TATL + TPAC = 40% of AC's passenger revenues. AC doesn't disclose margins by region, but there's nothing to suggest that the margins are so much higher on those routes that they would make a majority of AC's profits.

Code:
AC 2019 passenger revenues ($MM)
Domestic:    $5,233 30.4%
Transborder: $3,795 22.0%
TATL:        $4,468 24.9%
TPAC:        $2,449 13.6%
Other:       $1,287 7.5%
(Other is essentially LatAm and Caribbean - South America and Sun destinations, in AC's parlance)

Until borders open up AND people do not fear flying on long flights, the stock price for AC will be grim....
I don't disagree with that, as international flights (i.e. everything not domestic) are clearly a huge component, with domestic only being 30% of AC's business.
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Old Jul 23, 2020, 2:22 pm
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Originally Posted by Adam Smith
What's your basis for that? TATL + TPAC = 40% of AC's passenger revenues. AC doesn't disclose margins by region, but there's nothing to suggest that the margins are so much higher on those routes that they would make a majority of AC's profits.

Code:
AC 2019 passenger revenues ($MM)
Domestic: $5,233 30.4%
Transborder: $3,795 22.0%
TATL: $4,468 24.9%
TPAC: $2,449 13.6%
Other: $1,287 7.5%
(Other is essentially LatAm and Caribbean - South America and Sun destinations, in AC's parlance)



I don't disagree with that, as international flights (i.e. everything not domestic) are clearly a huge component, with domestic only being 30% of AC's business.
I've read that in past annual reports (Yes, I read them cover to cover, accounting and special items included) of the fact that the Trans-Pacific and Atlantic are the best ones for margin and most profitable. I do not know if you recall this, one of the main reasons Air Canada took over Canadian Airlines wayyyyyyy back was because they had a stronghold on the asia pacific routes and airport slots which were the most profitable.
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Old Jul 28, 2020, 11:46 am
  #474  
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https://ca.finance.yahoo.com/news/un...115429874.html

"United Airlines Suggests Air Canada (TSX:AC) Stock Will Go to $0"
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Old Jul 28, 2020, 12:16 pm
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Originally Posted by canadiancow
https://ca.finance.yahoo.com/news/un...115429874.html

"United Airlines Suggests Air Canada (TSX:AC) Stock Will Go to $0"
United suggested nothing of that. Motley fool did. Gotta love misleading headlines.
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Old Jul 28, 2020, 1:08 pm
  #476  
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Originally Posted by jazzsax
United suggested nothing of that. Motley fool did. Gotta love misleading headlines.
I think it's poorly worded, but not intentionally misleading. I didn't read it the way you did. More like "UA financial situation suggests AC stock may hit $0", which is exactly what the article describes.
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Old Jul 28, 2020, 1:31 pm
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Originally Posted by jazzsax
United suggested nothing of that. Motley fool did. Gotta love misleading headlines.
Yeah and a few days before Motley was saying that if you want to be a "millionaire" buy AC stock.

That's their stock in trade. Sky falling one day, stairway to heaven the next.
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Old Jul 29, 2020, 1:15 pm
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Originally Posted by mapleg
Yeah and a few days before Motley was saying that if you want to be a "millionaire" buy AC stock.
Fine print.........offer only available to billionaires.
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Old Jul 29, 2020, 4:18 pm
  #479  
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Originally Posted by eagle215
I've read that in past annual reports (Yes, I read them cover to cover, accounting and special items included) of the fact that the Trans-Pacific and Atlantic are the best ones for margin and most profitable. I do not know if you recall this, one of the main reasons Air Canada took over Canadian Airlines wayyyyyyy back was because they had a stronghold on the asia pacific routes and airport slots which were the most profitable.
Highest margin doesn't mean the most profits in absolute dollars (your "majority of profits"). TPAC has become much more competitive in recent years (rise of the Chinese airlines, BR, etc) than it was during the time you're thinking of (around the turn of the millenium). Meanwhile, domestic has settled in to a very cozy duopoly with very high fares. That's very different from the 90s and early 2000s when AC and CP were constantly challenged by WS, Jetsgo, Greyhound, etc... We also constantly see AC blowing Y seats out the door for barely the cost of fuel on TATL/TPAC routes.

TATL and TPAC may still be the highest-margin routes, but I'm not convinced that the margins are that much higher than domestic/TB that those 40% of sales make up >50% of the profits.
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Old Jul 30, 2020, 4:22 pm
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I don't think AC will have to worry about "competition" from the mainland carriers going forward. Rather, I expect that we will see AC pulling back from the PRC as the mainland carriers see their access on many routes curtailed. The reasons are obvious and air routes are low hanging fruit at this point. The new initiative of the 5 eyes to counter the PRC's policies will impact air travel and AC's investment in the PRC .Canada is the only one of the 5 eyes to not yet block Huawei in the 5G network, but once the announcement is made, we can expect some retaliation, and again AC is an easy target. Perhaps what AC will lose in respect to market access, it will gain by not having the cheap seat carriers driving airfares down. It will be interesting to see if AC declares the concern and reserves against it.
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